India's leading telecom operator, Bharati Airtel, has sold 67.53 million shares of its tower subsidiary, Bharti Infratel, for Rs 2,570 crore.
The move is seen as a bid to take on rival telcos and reduce debt.
In March, Airtel had sold 10.3 percent stake in Infratel for Rs 6,190 crore to a consortium of global private equity firms KKR and Canada Pension Plan Investment Board.
For the quarter ended June 30, 2017, Airtel had a debt of Rs 87,840 crore. The recent stake sale is aimed at strengthening the telco's cash reserves for investment in infrastructure. UBS and J P Morgan were the bankers for the transaction, Airtel said.
Post transaction, Bharti Airtel and its wholly owned subsidiaries will have an equity holding of 58 percent in Bharti Infratel.
According to an analyst, "deleveraging stake in Bharti Infratel to cut debt was needed, as the company now needs renewed focus on its core business and would be required to make investments in upgrading infrastructure."
The stake sale is expected to give Airtel the flexibility to expand its data network coverage and capacity to counter the new entrant – Reliance Jio.
Since its entry, Reliance Jio has disrupted the telco market big time. Most of the incumbent carriers were forced to cut their tariff. Airtel, too, has followed suit. The network provider's postpaid customers can now carry forward their monthly unused data balance up to a cap of 200 GB.
The telco's revenue has seen a sharp decline due to falling voice and data rates, which in turn diminished operating cash flows.
Airtel has planned a capital expenditure of $2.5 billion in the current fiscal year in India.
