Bharti Airtel to raise Rs3,000 crore through CPs: news reports

17 Aug 2022 , 07:50 AM

According to news reports, Bharti Airtel plans to raise up to Rs3,000 crore in short-term debt from the local money market in order to make the initial payment to the government for the 5G airwaves it purchased in the recently finished auction.

The news reports stated that the telecom operator is offering commercial papers (CPs) with maturities up to 12 months. The largest fund house in the nation, SBI Mutual Fund, is rumoured to have decided to purchase more than Rs1,000 crore of Airtel’s debt and will probably choose CPs maturing in February of next year at 6.53%.

The first instalment of the spectrum payment must be made by Wednesday.

The cash-strapped operator, Vodafone Idea, is also in talks with a number of public sector banks to finance roughly Rs1,600-1,700 crore, the report claimed.

Headed by Sunil Mittal in India’s first 5G auction, which finished earlier this month, Airtel purchased a spectrum worth Rs43,084 crore. According to notices posted on the Department of Telecommunications’ website, if Airtel decides to pay for 5G spectrum in 20 equal annual instalments, its first payment would be Rs3,848 crore and would be due by August 17 (Wednesday) to the department. It is usually believed that the courier will choose this form of payment.

On Tuesday, the BSE saw Airtel shares end 0.85% lower at Rs703.80 while Vodafone Idea shares ended 1.49% higher at Rs8.84.

By March 2024, Airtel hopes to have its entire country of India covered by non-standalone 5G service deployment. Gopal Vittal, the company’s CEO, recently declared that 5G coverage plans were ready for almost 5,000 cities and towns.

Market leader Jio was the biggest spender in the most recent 5G auction, spending Rs88,078 crore on airwaves. Airtel and Vi came in second place with Rs18,799 crore in spending.

The suggested CPs from Airtel received a standard rank of A1+ from India Ratings. The right to use the 5G frequency bands would expand Airtel’s spectrum footprint, the ratings company stated on July 27.