Warburg Pincus Sells 0.3 percent stake in Bharti Airtel in open market for Rs 1,649 crore

Warburg Pincus Sells 0.3 percent stake in Bharti Airtel in open market for Rs 1,649 crore

Warburg Pincus has sold Bharti Airtel shares worth Rs 1,649 crore in a block deal on Friday. The shares of telecom major were sold by Warburg Pincus via its affiliate PE firm Lion Meadow Investment Limited at Rs 868 per share. The block deal accounted for 1,90,00,000 shares of telecom major Bharti Airtel. During the last one year, Bharti Airtel stock has appreciated by nearly 30 percent. The shares sold by Warburg Pincus were acquired by US-based financial services company Capital Group in the open market. As per exchange records, Capital Group bought the shares in 11 different trades.

Bharti Airtel stock closed at Rs 872 on Friday as Indian markets closed at their highest ever level for BSE Sensex and NSE Nifty.

Telecom sector is fast changing in India with Reliance Jio and Bharti Airtel as two major competitors. Both the companies have launched 5G network with excellent data speeds and connectivity. Reliance Jio has been aggressive with pricing and marketing but Bharti Airtel has faced the challenge while keeping its market share. Bharti Airtel is planning to raise more funds from overseas market to reduce its local debt (on higher interest rate) and for capital expenditure in improving 5G network.

Bharti Airtel’s African business is growing fast and the company maintains healthy margins in that market. It is possible that Bharti Airtel lists its African operations as separate entity on the stock markets, unlocking value for shareholders. The African operations account for 30 percent of Bharti Airtel’s consolidated numbers.

Bharti Airtel has touched yearly high and low of Rs 889 and 629 respectively. The stock is currently trading at a P/E ratio of 60. During the quarter ending March 2023, Bharti Airtel reported sales of Rs 36,000 crore and net profit of Rs 4,226 crore. This marked the best performance of the telecom giant in terms of quarterly total revenue and net profit. Market analysts and brokerages have positive view on Bharti Airtel.

In its recent research report Geojit Financial Services has suggested BUY Rating for Bharti Airtel with target price of Rs 926, as the company has reported strong quarterly results driven by strong performance across all segments. Airtel’s Normalised ARPU increased to Rs. 195 in Q4FY23, from 178 in Q4FY22 as the company raised prices of its data plans.