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<ul><li>Airtel has been one of the resilient stocks over the last few months even as the AGR issue and Coronavirus-fueled market crash has wiped off lakhs of crores of investor wealth.</li><li>The Airtel stock could rally thanks to the Jio-Facebook deal and the weakening of Vodafone Idea.</li><li>The Airtel stock has been given a ‘Buy’ rating with a target price of ₹606, which is an upside of more than 20%.</li></ul>Airtel was the market leader before the arrival of <keyword id="6354504" type="DEFINITION" weightage="20" keywordseo="reliance-jio">Reliance Jio</keyword>, but it has since <a href="https://www.businessinsider.in/business/corporates/news/mukesh-ambanis-reliance-jio-becomes-the-largest-telco-by-revenue-and-subscribers-as-industry-shows-signs-of-recovery/articleshow/73667566.cms">ceded its lead position</a> to the Mukesh Ambani-owned telecom company. However, the gap between the two leading mobile service providers may be too huge, according to market experts. When it comes to the market cap, though, Airtel is 1.6 times smaller than Jio. Vodafone Idea, on the other hand, is 39 times smaller than Jio, which is currently valued at ₹4.4 lakh crore <a href="https://www.businessinsider.in/business/news/jio-a-3-year-old-telecom-company-is-now-bigger-than-hdfc-infosys-and-itc-and-indias-largest-bank/articleshow/75290132.cms">after the Facebook deal</a>. <div type="image" title="Jio market cap telecom companies" msid="75533839" hostid="261"></div> <div type="Article" hostid="261" msid="75290132" title="Jio, a 3-year old telecom company, is now bigger than HDFC, Infosys and ITC – and India's largest bank" mstype="2" mssubtype="0"></div> Analysts suggest that Airtel has been one of the more resilient stocks in the market even as the economic downturn and Coronavirus crisis have wiped lakhs of crores of investor wealth. Its strong financials, the weakening of Vodafone Idea and the Jio-Facebook deal have all contributed to Airtel’s stock scaling back to its 52-week high of ₹568. <div type="image" title="Airtel stock 01_01_20 to 04_05_20." msid="75533863" hostid="261"></div> “Airtel has been able to raise funds to meet current AGR demands. In the short-term, Airtel will be the beneficiary if there is any weakening of Vodafone Idea,” said Mahesh Uppal, Telecom Analyst &amp; Director, Com First India told Business Insider. “It is often forgotten that, in general, Airtel and Vodafone, being early entrants to the market, have a higher quality of subscribers, in terms of paying capacity, than their competitors. If the AGR issue does not get resolved to the comfort of Vodafone Idea, Airtel will be best placed to benefit,” he further added. "Expects positive for Bharti Airtel after US based fund Silver Lake partner bought Reliance Jio stake at a premium. Higher valuation on Reliance Jio may positive on Bharti Airtel," <a href="https://twitter.com/MotilalOswalLtd/status/1257514187766460416" data-type="tilCustomLink" style="">said</a>Motilal Oswal. AGR, short for adjusted gross revenue, is a revenue sharing agreement between the Indian government and the telecom companies. According to this agreement, the telecom companies have to share a percentage of their AGR as annual license fee and spectrum usage charges. The Supreme Court recently ordered companies to pay up a disputed amount retrospectively for over a decade. According to the Department of Telecom estimates, Airtel owes ₹35,586 crore to the government. What are the analysts saying? “We retain our constructive view on Bharti Airtel (Bharti) considering its ability to capitalise on the higher data demand tailwind leveraging its strong balance sheet and network capacity,” said Edelweiss Research in its report dated April 20 where it pegged the target price for Airtel at ₹606. <table><tbody><tr><td>Brokerage</td><td>Target price for Airtel</td></tr><tr><td>Edelweiss </td><td>606</td></tr><tr><td>Angel Broking</td><td>594</td></tr></tbody></table> India is <a href="https://www.businessinsider.in/tech/news/heres-why-facebooks-mark-zuckerberg-is-paying-top-dollar-for-a-stake-in-mukesh-ambanis-reliance-jio/articleshow/75286331.cms">expected to add</a> more than 150 million active internet subscribers in the next 12 months, according to IAMAI. Given the weakening of Vodafone-Idea, both as a firm and a brand, the India telecom market is narrowing down to a duopoly between Reliance Jio and Airtel. The difference in market value of the two telcos is just too huge given the growth potential and the lack of competition. See also: <a href="https://www.businessinsider.in/business/telecom/news/india-is-changing-its-mobile-habits-and-that-can-help-airtel-and-vodafone/articleshow/75152973.cms">India is changing its mobile habits and that can help Airtel and Vodafone</a> <a href="https://www.businessinsider.in/business/telecom/news/airtel-signs-7636-crore-deal-with-nokia-to-enhance-4g-network-lay-foundation-for-5g-network/articleshow/75423000.cms">Airtel signs ₹7,636 crore deal with Nokia to enhance 4G network, lay foundation for 5G network</a> <a href="https://www.businessinsider.in/business/corporates/news/reliance-jio-stake-sale-to-silver-lake-boosts-ril-share-valuation/articleshow/75526873.cms">Reliance Jio’s valuation jumps more than half a billion dollars in just 12 days, thanks to Silver Lake</a>

Airtel shares set for a catch up rally after Reliance Jio takes a huge valuation lead

Telecom major Bharti <keyword id="15491" type="COMPANY" weightage="20" keywordseo="Airtel">Airtel</keyword> on Monday launched a new platform called Airtel IQ, marking the company's entry into an estimated $1 billion Indian cloud communications market. Airtel IQ, a cloud-based omni-channel communications platform, is designed to enable brands to deepen engagement with customers through timely and secure communication. Many of India's biggest companies such as Swiggy, Justdial, Urban Company, Havells, Dr. Lal Path Labs and Rapido have signed up as customers for Airtel IQ during the beta phase itself, the company said. "Businesses are increasingly looking to cloud-based digital platforms to engage with consumers and Airtel IQ is built to raise the bar when it comes to brands delighting consumers," Adarsh Nair, Chief Product Officer, Bharti Airtel, meanwhile, had this to say "So, the next time you enjoy shopping online, ordering food from your favourite restaurant or hailing a ride, remember there's a bit of Airtel IQ in there making it happen seamlessly and safely." Airtel IQ eliminates the need for multiple communication platforms for different channels. With just a slice of code, businesses can embed communication services such as voice, SMS, interactive voice response (IVR) in their applications and digital properties across desktop and mobile, all through a unified platform. SEE ALSO: <a href="https://www.businessinsider.in/tech/news/airtel-partners-with-aakash-institute-to-bring-medical-and-engineering-education-content-to-its-dth-platform/articleshow/78640408.cms">Airtel partners with Aakash Institute to bring medical and engineering education content to its DTH platform</a>

Airtel forays into cloud communications market in India

New Delhi, May 26 () Shares of Bharti Airtel on Tuesday fell nearly 6 per cent after promoter firm Bharti Telecom sold 2.75 per cent stake in Airtel to institutional investors in the secondary market. It dropped 5.71 per cent to close at Rs 559.15 on the BSE. During the day, it tumbled 5.96 per cent to Rs 557.65. On the National Stock Exchange (NSE), shares of the company fell 5.72 per cent to close at Rs 559.25. Bharti Airtel was the top loser in the Sensex and Nifty pack. Promoter firm Bharti Telecom has sold 2.75 per cent stake in Airtel to institutional investors in the secondary market, raising over Rs 8,433 crore, the company said on Tuesday. The sale proceeds will be fully utilised to repay debt at Bharti Telecom and will make the promoter holding company a 'debt-free company', it said. Bharti Group and Singtel will continue to hold a majority stake in Bharti Airtel at 56.23 per cent after the transaction, it added. Announcing the closure of secondary block placement of Airtel shares, Bharti Telecom said the issue oversubscribed multiple times with healthy mix of all categories of investors, long only and hedge fund investors across geographies in India, Asia, Europe and the US. "Bharti Telecom Limited, the promoter company of Bharti Airtel Limited have today sold 2.75 per cent stake in Bharti Airtel to institutional investors through an accelerated book building process in the secondary market," it said. SUM HRS

Bharti Airtel shares fall nearly 6 pc

<ul><li>As a mountain of debt threatens Airtel’s survival, the company is preparing a ₹250 billion rights issue. </li><li>GIC Pvt Ltd, <keyword id="6356662" type="LOCATION" weightage="20" keywordseo="singapore">Singapore</keyword>’s sovereign wealth fund, is subscribing to a fifth of the shares in the issue. </li><li>In addition, <keyword id="16117" type="COMPANY" weightage="20" keywordseo="SingTel">Singtel</keyword> and Airtel’s promoters will invest ₹118 billion in the rights issue.</li></ul><keyword id="6354287" type="COMPANY" weightage="20" keywordseo="bharti-airtel">Bharti Airtel</keyword> has burnt billions in cash, and piled on even more in debt in its fight with the world’s 13th richest man Mukesh Ambani, the owner of Reliance <keyword id="2003276" type="COMPANY" weightage="20" keywordseo="Jio">Jio</keyword>, as the two, along with Vodafone Idea, <keyword id="18179" type="EVENT" weightage="20" keywordseo="battle">battle</keyword> to garner as much of India’s <keyword id="6354776" type="COMPANY" weightage="20" keywordseo="Telecom">telecom</keyword> market. As the mountain of debt threatens Airtel’s survival, the company is preparing a ₹250 billion rights issue. And it’s got the support of the Singapore government. According to an exchange filing, GIC Pvt Ltd, Singapore’s sovereign wealth fund, is subscribing to a fifth of the shares in the issue. The ₹50 billion investment will be GIC’s first in India’s competitive telecom sector. The move has precedence, given that Singapore’s largest mobile operator, Singtel, recently <a href="https://telecom.economictimes.indiatimes.com/news/bharti-airtel-shares-rise-after-singtel-ups-stake-by-investing-rs-2649-cr-in-parent/62784319">upped its stake in Airtel</a> after investing ₹27 billion in the company. In fact, both Singtel and Airtel’s promoters will invest <a href="https://economictimes.indiatimes.com/markets/stocks/news/airtel-promoters-to-participate-in-rs-16786-crore-rights-issue/articleshow/68297617.cms">₹118 billion</a> in the rights issue. After the rights issue, Singtel is expected to have a <a href="https://www.moneycontrol.com/news/business/bharti-airtel-says-promoters-will-take-part-in-rights-issue-3617511.html">35% stake</a> in the company. Earlier this month, Moody’s, an international ratings agency, <a href="https://www.businessinsider.in/airtel-got-its-lowest-credit-rating-because-of-jio/articleshow/67847220.cms">downgraded Airtel’s debt</a> to “significant credit risk” in light of the company’s over-leveraged nature an cash flow problems. At the end of December 2018, Airtel's net debt burden stood at a little over ₹1.06 trillion. Last week, the board of Airtel approved a plan to raise <a href="https://economictimes.indiatimes.com/markets/stocks/news/bharti-airtel-gets-board-approval-to-raise-up-to-rs-32000-crore/articleshow/68202185.cms">₹320 billion</a> from capital markets, with ₹250 billion coming from the sale of shares and the remainder through the issue of foreign currency-denominated bonds. The capital raising plan will enable India’s second-largest telecom provider to meet its capital expenditure targets, pay down debt and effectively take on Reliance Jio, which has consistently <a href="https://www.businessinsider.in/reliance-jio-continues-to-eat-into-airtel-and-vodafone-ideas-pie/articleshow/68088881.cms">eaten into its market share </a>and subscriber base since its launch in September 2016. While the fundraising plan will help Airtel reduce its debt burden, it might not be enough to stabilise its credit rating, according to <a href="https://economictimes.indiatimes.com/markets/stocks/news/airtels-rs-25000-crore-fund-infusion-not-enough-to-stabilise-rating-sp/articleshow/68290893.cms">S&amp;P Global</a>, a ratings agency, due to continued capital spending amid price competition from Jio and Vodafone Idea. However, Moody’s had a more favourable outlook on the rights issue, terming it <a href="https://economictimes.indiatimes.com/markets/stocks/news/airtels-proposed-rights-issue-credit-positive-moodys/articleshow/68268767.cms">“credit positive”</a>. SEE ALSO: <a href="https://www.businessinsider.in/reliance-jio-continues-to-eat-into-airtel-and-vodafone-ideas-pie/articleshow/68088881.cms">Reliance Jio continues to eat into Airtel and Vodafone Idea's pie</a> <a href="https://www.businessinsider.in/airtel-got-its-lowest-credit-rating-because-of-jio/articleshow/67847220.cms">Airtel just got assigned its lowest credit score by an international ratings agency as pricing pressures continue</a> <a href="https://www.businessinsider.in/airtel-cisco-ready-for-indias-largest-5g-network/articleshow/68154880.cms">Airtel and Cisco are teaming up to build India’s largest 5G-ready network — spectrum auction pending</a>

The government of Singapore backs Airtel in the battle for dominance against Mukesh Ambani's Reliance Jio

<ul><li>Jio’s predatory data tariffs are still 25 to 30% lower than that of Airtel and Vodafone Idea. </li><li>Airtel and Vodafone’s joint market share is expected to drop 25% to 27% each. </li><li>The total debt of the top three telecom players — Reliance Jio, Bharti Airtel and Vodafone Idea — is as high as ₹3.9 lakh crore. </li></ul> The telecom war that <keyword id="3820" type="PERSON" weightage="20" keywordseo="Mukesh-Ambani">Mukesh Ambani</keyword>’s Reliance Jio started will rage on for another two years, according to a report by India Ratings. The stress of investments and the lack of revenues due to deep discounting is hurting the entire industry, including Jio. The total debt of the top three telecom players — Reliance Jio, Bharti Airtel and Vodafone Idea — is a massive ₹3.9 lakh crore, according to the report. That’s almost <a href="https://www.businessinsider.in/sensex-today-jumps-150-points-after-rbi-move-to-transfer-surplus/articleshow/70852202.cms">twice the amount the </a>Reserve Bank of India gave the Indian government, which is ₹1.76 lakh crore this week. The debt run up by the three war ravaged players is also almost half of the country’s total fiscal deficit which is<a href="https://www.livemint.com/news/india/fiscal-deficit-crosses-61-of-budgeted-target-in-first-three-months-of-fy20-1564574137744.html"> pegged at around</a> ₹7 lakh crore for 2019-20. Fiscal deficit is the amount of money the government is falling short of, to carry on its planned expenditure. RJio’s market share will go up 40% to 45% It doesn’t look like the debt is going away anytime soon. Jio’s predatory data tariffs are still 25 to 30% lower than that of Airtel and Vodafone Idea. India Ratings expects RJio’s market share to increase 40% to 45% over the next two years. At the end of the last financial year, it stood at around 30%. “Airtel and Vodafone’s joint market share is expected to drop 25% to 27% each,” the report predicted. Jio’s already declared that it’s targeting 50% market share in total telecom revenues, without mentioning a timeline. At his annual general meeting, Ambani promised Reliance Industries’ shareholders of Jio’s growth. The company already has around 340 million customers but is aiming for more. “The potential for growth is immense, and half a billion customers is now well within our reach,” Ambani said. No free cash flow available till 2021-22 As a result of high debt and continuous losses, the telecom players will remain structurally weak for the next two years, says the report. This means they will have no or low free cash in hand. “These companies will continue to rely on refinancing or capital infusion. However, near-term liquidity is supported by large cash levels available post capital infusions (Vodafone Idea, Airtel) and continued financial flexibility due to strong parentage (Jio),” the report said. From here on, there are a few things that can change the fortunes of the flailing telecom sector starting with Jio’s pricing strategy. Any change and possible increase in tariffs and subsequent response by other two players, will pave the way for recovery in the telecom sector. SEE ALSO <a href="https://www.businessinsider.in/the-difference-between-mukesh-ambanis-jio-and-ani-ambanis-reliance-communications/articleshow/70869465.cms">Mukesh Ambani's strategy with Reliance Jio is avoiding Anil Ambani's mistakes with RCom</a>

Top three telecom companies’ debt is at ₹3.9 lakh crore — that’s half of India’s fiscal deficit

<ul><li>Now, the market value of <keyword id="6354504" type="DEFINITION" weightage="20" keywordseo="reliance-jio">Reliance Jio</keyword>, at ₹4.9 lakh crore, is nearly twice the size of Airtel, whose market capitalisation is down to ₹2.4 lakh crore.</li><li>The latest blow came from competitor Jio's new post paid plans that offer a slew of added benefits.</li><li>Investors fear that competitive pressures on one hand from Jio and Vodafone Idea surviving on the other may hurt Airtel.</li></ul>Investors in Bharti Airtel had bet the Vodafone Idea may not survive for too long, and that the pressure of competitive tariffs from Reliance Jio is now in the past. Both bets seem to have come undone and shares of Airtel, India's second largest telecom service provider, have lost 25% of their value since the peak the stock hit in May 2020. Now, the market value of Reliance Jio, at ₹4.9 lakh crore, is nearly twice the size of Airtel, whose market capitalisation is down to ₹2.4 lakh crore. <div type="image" title="airtel share price sep 23" msid="78269455" hostid="261" caption="&amp;lt;p&amp;gt;Reliance Jio, at &amp;#8377;4.9 lakh crore, is nearly twice the size of Airtel, whose market capitalisation is down to &amp;#8377;2.4 lakh crore, after a 25% fall since the peak in May 2020.&amp;lt;br&amp;gt;&amp;lt;/p&amp;gt;"></div> <div type="Article" hostid="261" msid="78257460" title="Jio's new postpaid plans offer unlimited calling, Netflix, Prime Video and Disney+ Hotstar subscription" mstype="2" mssubtype="0"></div> Now, as it stands, Reliance Jio, owned by Asia's richest man <keyword id="3820" type="PERSON" weightage="20" keywordseo="Mukesh-Ambani">Mukesh Ambani</keyword>, is aspiring for a lot more than Airtel, which seems to be focussed on mobile services and broadband for now. “Similar to Alibaba or Tencent which created tech-based ecosystems in China, we find RIL best positioned to create a similar ecosystem in India. In the next two-three years, we expect RIL to have a captive mobile base of over 500 million users,” said a Bank of America report dated July 16. A factor that shareholders appear to have factored in but the analysts have not. <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.6260872500000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Brokerage </td><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.6260872500000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Target price </td></tr><tr><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.6260872500000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Angel Broking </td><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.6260872500000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹672 </td></tr><tr><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.6260872500000001pt;border-top:solid #000000 0.6260872500000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Emkay Global </td><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.6260872500000001pt;border-top:solid #000000 0.6260872500000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹684 </td></tr><tr><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.6260872500000001pt;border-top:solid #000000 0.6260872500000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Motilal Oswal </td><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.6260872500000001pt;border-top:solid #000000 0.6260872500000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹700 </td></tr><tr><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.6260872500000001pt;border-top:solid #000000 0.6260872500000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Geojit BNP Paribas </td><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.6260872500000001pt;border-top:solid #000000 0.6260872500000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹645 </td></tr><tr><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.6260872500000001pt;border-top:solid #000000 0.6260872500000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">ICICI Securities </td><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.6260872500000001pt;border-top:solid #000000 0.6260872500000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹700 </td></tr></tbody></table>Source: Economic Times The fear of tougher competition While Jio is potentially <a href="https://www.businessinsider.in/business/news/mukesh-ambani-owned-reliance-jio-compared-to-alibaba-and-tencent/articleshow/77059624.cms" data-type="tilCustomLink" target="_blank">shaping into Alibaba and Tencent rolled into one</a>, it has kept the heat alive in the mobile telephony space. After mopping up a big chunk of the mass market, mostly low-margin prepaid users, the Ambani firm is now targetting the high-spending post-paid consumers with new plans bundled with a free subscription to OTT platforms like Netflix, Amazon Prime Video, and Disney+ Hotstar. On the other hand, Vodafone Idea has rebranded itself into Vi, and may, reportedly, find investors in <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-may-need-up-to-18800-crore-in-next-two-years-and-tariff-hikes-to-survive-says-a-new-report/articleshow/77923943.cms">US tech giants Amazon and Verizon</a>. This could give the Birla Group company the cash it needs to survive for the next two years, according to the Jefferies report. Those backing Airtel had hoped that Vi will fall by the wayside and the market will be down to a duopoly that they share with Jio. Bharti Chairman Sunil Mittal <a href="https://www.businessinsider.in/business/telecom/news/airtel-wants-to-increase-data-prices-to-100-per-gb-sunil-mittal-asks-subscribers-to-prepare-to-pay-a-lot-more/articleshow/77734318.cms" data-type="tilCustomLink" target="_blank">had recently said that</a> a fair price for mobile data in India would be a ₹100 per gigabyte (GB), whereas the current price of ₹10 per GB, is a 'tragedy'. However, it wasn't meant to be. Far from it, Jio's latest salvo will now force Airtel to act and protect its post-paid user base. All these put together have shaved off 25% from Airtel's share value in a little over four months. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/banks/news/yes-bank-ceo-prashant-kumar-clarifies-that-the-forensic-investigation-isnt-restricted-to-the-top-10-defaulters/articleshow/78255868.cms">EXCLUSIVE: YES Bank CEO Prashant Kumar clarifies that the forensic investigation isn't restricted to the top 10 defaulters</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/careers/news/interview-cams-ceo-says-they-are-actively-hiring-through-the-pandemic/articleshow/78269110.cms">INTERVIEW: CAMS CEO says they are actively hiring through the pandemic</a><a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/careers/news/interview-cams-ceo-says-they-are-actively-hiring-through-the-pandemic/articleshow/78269110.cms"></a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/hindustan-unilever-chairman-is-urging-the-government-to-spend-more-to-boost-consumption/articleshow/78267444.cms">Data shows why HUL Chairman is urging the government to spend more to boost consumption</a>

Reliance Jio is now twice as valued as Airtel that is down 25% from its peak in May

<ul><li><keyword id="15491" type="COMPANY" weightage="20" keywordseo="Airtel">Airtel</keyword> is raising $1.25 billion by issuing a minority stake in its African unit to a consortium of investors led by <keyword id="6402698" type="UNKNOWN" weightage="20" keywordseo="warburg-pincus">Warburg Pincus</keyword>, ahead of an <keyword id="6354763" type="UNKNOWN" weightage="20" keywordseo="ipo">IPO</keyword> of the business next year. </li><li>The deal will be used to trim Airtel’s debt burden, which ballooned to over ₹1 trillion in the quarter ended June. </li><li>While Airtel will get a short-term breather from its debt woes, it will continue to bleed cash at home as it tries to defend its market share from Reliance Jio. </li></ul> Airtel has been on a bumpy road off-late. A price war with newbie Reliance Jio in <keyword id="3658" type="LOCATION" weightage="20" keywordseo="India">India</keyword> drove the Indian telecom giant to it to its first annual loss at home <a href="https://economictimes.indiatimes.com/markets/stocks/earnings/airtel-consolidated-4q-profit-falls-78/articleshow/63898251.cms">since 2003</a> earlier this year — and has seen its net debt cross the <a href="https://s3-ap-southeast-1.amazonaws.com/bsy/iportal/images/Quarterly-Report-Q1-FY19_080896B560E55F97671795340BA41C68.pdf">₹1 trillion </a>mark. And now, Airtel is forced to dial back on its international ambitions by ceding a significant stake in its profitable African business. The company <a href="http://infopub.sgx.com/FileOpen/BAL_PR-20181024-InvestinAirtelAfrica.ashx?App=Announcement&amp;FileID=530459">announced </a>that a deal to sell a minority stake in its African unit had been closed on Oct. 23.The move will help the company cull its debt burden and defend its domestic market share. The Indian telecom major said that it was raising $1.25 billion from a consortium of investors led by Warburg Pincus, Singapore’s Temasek and Japan’s Softbank Group. An IPO of the unit will also go ahead as planned in 2019, helping Airtel raise additional funds to deleverage its balance sheet. The deal, which values the African business at $4.4 billion, will give Airtel a breather from its debt woes. Since Jio’s entry in September 2016, India’s largest telco has been forced to go on a debt-fuelled expansion plan which has involved the acquisition of spectrum, a dramatic mark-down in prices and corresponding rise in capital expenditure. However, the cash burn will continue in the medium term as Airtel tries to match Jio’s ceaseless spending. This, coupled with the impending launch of 5G networks and the required capital investment, could sink the telco further into the debt morass. Unfortunately, this seems to be the only way out for Airtel. It has no choice but to keep investing in its home market, where it derives a bulk of its revenue, at the cost of its international ambitions. Backed by the might of Reliance Industries, which is India’s largest company by market cap, it seems that Jio has carte blanche when it comes to investing in expansion. It is even making moves in the <a href="https://www.businessinsider.in/after-disrupting-the-telecom-industry-with-jio-mukesh-ambani-makes-a-52-billion-play-for-broadband-and-cable-dominance/articleshow/66270885.cms">broadband</a> space. The outcome of Airtel’s debt reduction plan has significant implications for Indian consumers. If the company were to bow out of the race to dominate the telecom market, it could spell doom for subscribers as Jio would be free to raise prices significantly.

You Searched For "Airtel market share" and got 7 results

Airtel shares set for a catch up rally after Reliance Jio takes a huge valuation lead

Rounak Jain

Airtel forays into cloud communications market in India

IANS

Bharti Airtel shares fall nearly 6 pc

PTI

The government of Singapore backs Airtel in the battle for dominance against Mukesh Ambani's Reliance Jio

Dilsher Dhillon

Top three telecom companies’ debt is at ₹3.9 lakh crore — that’s half of India’s fiscal deficit

Katya Naidu

Reliance Jio is now twice as valued as Airtel that is down 25% from its peak in May

Sriram Iyer

Facing a furious price war at home, India’s largest telecom company Airtel is being forced to backpedal on its global ambitions

Dilsher Dhillon

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