In keeping with its ongoing portfolio optimization plan, Singapore Telecommunications Ltd. (Singtel) has announced the sale of a 1.2% direct share in India’s Bharti Airtel for $1.54 billion. Pastel Ltd., a fully owned subsidiary of Singtel, carried out the transaction by selling 71 million Airtel shares for ₹1,814 each. This price showed the high demand and competitive pricing attained during the auction, as it represented a 2.85% discount to Airtel’s closing stock price on Thursday.
Singtel’s ownership of Bharti Airtel will drop from 29.5% to 28.3% as a result of this deal, with the remaining portion now being worth about S$48 billion. Both local mutual funds and long-only foreign funds showed a strong interest in the private placement. Singtel claims that because the offering had been considerably oversubscribed, the final pricing was tighter than expected and the transaction size increased. This transaction generated an estimated S$1.4 billion for the firm, which will help fund its continuing capital management efforts.
Strategic Rationale and Continued Commitment:
Singtel emphasized that this sale is part of its broader strategy to streamline its asset portfolio and enhance long-term shareholder value. Despite the reduction in its stake, Singtel reaffirmed its commitment to Bharti Airtel as a long-term strategic investor. The company has been associated with Airtel for over two decades, playing a key role in its growth and development as one of India’s leading telecom operators.
Arthur Lang, Group Chief Financial Officer of Singtel, highlighted that the transaction allows the company to crystallize value at an attractive valuation while maintaining a significant shareholding in Airtel. He expressed confidence in Airtel’s strong growth potential, especially as India pursues its vision of achieving a $1 trillion digital economy. Lang also welcomed the entry of new, like-minded investors who share Singtel’s conviction in Airtel’s future, noting that this will further strengthen the company’s shareholder base and collective support for its long-term growth ambitions.
Previous Stake Sales and Capital Management:
This latest deal follows a series of earlier stake sales by Singtel in Bharti Airtel. In 2022, Singtel sold a 3.3% stake to Bharti Telecom, and in 2024, it divested a 0.8% stake to GQG Partners. Together, these transactions raised approximately S$3.5 billion. The proceeds from these sales have been instrumental in supporting Singtel’s 5G rollout, expansion of digital infrastructure, and delivery of sustainable returns to shareholders.
Singtel’s approach to active capital management is aimed at optimizing its asset portfolio and ensuring that it remains agile in a rapidly evolving telecommunications landscape. The company’s continued presence in Airtel, even after these divestments, signals its confidence in the Indian telecom market and Airtel’s leadership within it.
Market Impact and Future Outlook:
The news of the stake sale had an immediate impact on Bharti Airtel’s stock, with shares dipping nearly 3% in Friday’s mid-morning trade. However, market analysts suggest that the entry of new institutional investors and the strengthening of Airtel’s shareholder base could provide long-term stability and support for the company’s growth trajectory.
There is not expected to be any change in the effective holding of the Mittal family, who remain key promoters of Bharti Airtel through Bharti Telecom Ltd, which continues to hold a significant stake in the company. Singtel, for its part, remains a major shareholder, retaining a 28.3% direct stake and a substantial indirect interest through its shareholding in Bharti Telecom.
Singtel’s move is seen as a step towards further aligning its portfolio with its strategic priorities, while Bharti Airtel stands to benefit from a diversified and strengthened investor base. As India’s digital economy continues to expand, both companies are positioned to capitalize on new opportunities in telecommunications, digital services, and infrastructure.
The successful completion of this stake sale underscores the strong investor confidence in Bharti Airtel’s prospects and highlights Singtel’s disciplined approach to capital allocation and shareholder value creation.
