Qatar Foundation has bought 5 percent stake in the Inidan telecom operator Bharti Airtel Ltd for $1.26 billion. The deal was pipelined through Qatar Foundation Endowment (QFE). As per the deal, the telco will be issuing 199,870,006 new shares to QFE at 340 rupees each.
According to Reuters report, QFE would be an active investor in Bharti Airtel and looks to be one for a long time. This should aid in the strengthening of the telco's capital structure and should be able to clear the debts, it has inhabited, after incurring drop in profits for thirteen straight quarters. Bharti Airtel apparently had $11.7 billion of net debt to clear.
"After the Qatar Foundation Endowment deal, the capital structure will definitely improve to some extent. They have got pretty substantial debt on their balance sheet of some Rs 70,000 crore plus," said Harit Shah, Analyst at Nirmal Bang.
"So the event is actually a positive for the stock but having said that fundamentally, the overall outlook is still relatively muted," he added.
"I am delighted to welcome another high quality long-term institutional investor to our shareholder base...this agreement exemplifies further strengthening of the already deep economic and cultural relations between Qatar and India," Bharti Chairman Sunil Bharti Mittal said in the statement.
"As a long-term global investor, our shareholding gives us exposure to a high growth sector in key emerging markets. QFE looks forward to supporting Bharti in realising the full potential of this world class business," QFE Acting Chief Executive Officer Rashid Al-Naimi said.