Big fund houses chip in as Airtel’s rights issue oversubscribed 1.44x

Lion Meadow Investment, Mirae Asset Large Cap Fund, EuroPacific Growth Fund, SBI Life Insurance, LIC, ICICI Prudential MF, SBI MF and Nippon MF are among the big-ticket fund houses that have bid for shares in

Bharti Airtel

‘s near ₹21,000-crore rights issue that closed on Thursday, three people with direct knowledge told ET.

“Based on preliminary information received, the rights issue has been subscribed by approx. 1.44 times, overbid by both public and promoter/ promoter group,” Bharti Airtel said in a BSE filing late Thursday. It did not disclose the investor names.

“The applications received in the rights issue are subject to verification and clearing of payments, as applicable, and finalisation of the basis of allotment,” it said.


Some large global fund houses and private equity players including “Blackrock, Vanguard, and HSBC have renounced their rights entitlements (REs) and sold off their holdings at a decent premium”, said a top industry executive aware of details.

Bharti Airtel shares closed 1.7% lower at ₹696.40 on the BSE on Thursday.

Airtel did not reply to ET’s queries on the specific fund houses that have participated in the rights issue.

The Sunil Mittal-led telco plans to use the issue proceeds to bolster its balance sheet and build a war chest to clear its statutory dues, expand 4G networks, and prepare for an upcoming 5G spectrum auction.

Subscribers to Airtel’s rights issue – which opened on October 5 – need to pay 25% on application and the rest in two additional calls as may be decided by Airtel’s board, though within 36 months. Airtel shareholders will receive one share for every 14 held in the telco at ₹535 a unit, implying a 7% dilution.

Airtel had said its promoter and promoter group will collectively subscribe to the full extent of their aggregate rights entitlement – or in proportion to their shareholdings in the company. In addition, they will also subscribe to any unsubscribed shares in the issue.

Airtel’s promoter group – the Mittal family and SingTel – hold nearly 56% of the telco with the rest held by the public. The Mittal family directly and indirectly owns around 24.13% while SingTel holds 31.72%.

Analysts estimate that Bharti Airtel’s ongoing rights issue requires its promoters, SingTel and Bharti Enterprises of the Mittal family, to contribute around ₹6,661 crore and ₹5,067 crore, respectively. Of this, their immediate 25% upfront contributions work out to ₹1,665 crore and ₹1,267 crore, respectively.