Bharti Airtel Considering Offshore Bond Issue to Raise $1 Billion

Key Highlights :

1. Telecom major Bharti Airtel is considering an offshore bond issue and is likely to raise up to $1 billion.

2. This comes as the telecom giant plans to refinance high cost debt, strengthen its balance sheet and also cover some of its 5G capital expenditure requirements.

3. The reports have also stated that the company is in talks with Barclays, Standard Chartered Bank and Citi in order to know the possibility of floating US dollar bonds in the overseas markets in one or more tranches this fiscal year.

4. Meanwhile, market analysts have said that Jio and Bharti Airtel together will have about 81 percent market share by adjusted revenue by FY25, making the competition for Vodafone Idea tougher in the coming quarters.

5. Prior to that, as per data mentioned by the Telecom Regulatory Authority of India (TRAI), Jio pipped Airtel in revenue market share (RMS) in the fourth quarter of fiscal year 2023.

     Telecom major Bharti Airtel is reportedly considering an offshore bond issue to raise up to $1 billion for various purposes including refinancing high-cost debt, strengthening its balance sheet and covering some of its 5G capital expenditure requirements.

     According to recent reports, the company is in talks with Barclays, Standard Chartered Bank and Citi to explore the possibility of floating US dollar bonds in the overseas markets in one or more tranches this fiscal year. The move is expected to help the company reduce its debt burden and manage its 5G capital expenditure effectively.

     The Indian telecom sector is currently dominated by Jio and Bharti Airtel, which together account for 77 percent of the sector’s revenue. This is expected to increase to 81 percent by FY25CL, as per market analysts.

     The competition for Vodafone Idea has become tougher in the coming quarters due to the delayed 5G rollout. In order to stay competitive, the third private telco needs to launch 5G services at the earliest.

     In the fourth quarter of FY2023, Jio pipped Airtel in revenue market share (RMS) by 13 basis points (bps) to 41.7 percent, while Airtel's RMS remained unchanged at 36.5 percent. Vodafone Idea (vi) lost its RMS by 42 bps to 16.6 percent, as per data mentioned by the Telecom Regulatory Authority of India (TRAI).

     The planned offshore bond issue by Bharti Airtel is likely to help the company reduce its debt burden, strengthen its balance sheet and manage its 5G capital expenditure effectively. The move is also expected to make the competition for Vodafone Idea tougher in the coming quarters, as the third private telco needs to launch 5G services at the earliest to stay competitive.

     It remains to be seen how the company’s offshore bond issue pans out and how it affects the Indian telecom sector in the long run. In the meantime, investors should keep an eye on the latest developments in the sector and understand their own investment approach to make informed decisions.

Continue Reading at Source : livemint