Airtel share prices zoom as Singtel decides to sell 3.3% stake to Bharti Telecom

Singtel's stake in Airtel will reduce from 31.4% to 29.7% as it will sell a 3.3% stake to Bharti Telecom for about 2.25 billion Singapore dollars (about Rs 12,931 crore). The news led to Airtel stocks surging by 1.2% in the early hours of the day while Singtel stocks rose by 2% in Singapore markets. 

So who were the shareholders in Bharti Airtel?

• About 55.8% of Bharti Airtel's shares are held by promoters while the rest ie 44.21% is traded on the stock exchange by the public.
• This 55.8% is directly held by three primary shareholders: Bharti Telecom (35.85%), Singtel (13.90%), and Indian Continent Investment Limited (6.04%).
• Bharti Airtel's largest shareholder Bharti Telecom is controlled by two shareholders: Sunil Mittal (50.56%) and Singtel (49.44%). 
• You might have heard of Singtel, a Singapore-based telecom company that is the largest telecom company in South East Asia. Along with its 13.9% direct holding, Singtel's indirect holding through Bharti Telecom comes up to about 17.5%. Thus Singtel had a total holding of 31.4% in Bharti Airtel before the stake sale. 

What is Singtel's shareholding post the 3.3% stake sale? By the end of the stake sale, Singtel will directly hold 10.5% and indirectly hold 19.2% stake in Bharti Airtel, thus having a total of 29.7% stake from 31.4%. 

Why is Singtel selling its stake? The Singtel Group wants to recycle its capital, re-balance and optimise its portfolio in the telecom sector and give its investors better returns by dis-investing from its latent assets to fund new growth engines.  

Share prices zoom: Share prices of Airtel surged over 1.2% in early trade today (August 25, 2022), while the benchmark Nifty 50 index was up 0.4%. The price of Airtel's shares when the day began was Rs 742 at 9.15 am while at 9.20 am, the share prices zoomed to 751. The share price has gone up by about 10% in the last one month and by about 8% in the last 6 months.  

Singtel shares also rose nearly by 2% in its home market, Singapore.