Airtel Considers Offshore Bond Issue to Raise $1 Billion
In a bid to refinance its high-cost debt and bolster its balance sheet, leading telecom company Bharti Airtel is contemplating an offshore bond issue, known as the Airtel Offshore Bond Issue, that could potentially raise up to $1 billion, according to sources familiar with the matter as reported by Economic Times.
The move comes as Bharti Airtel aims to cover its capital expenditure requirements for 5G infrastructure while seeking to reduce its financial burden through the issuance of bonds in the overseas markets. Discussions are underway with prominent financial institutions such as Barclays, Standard Chartered Bank, and Citi to explore the feasibility of floating US dollar bonds in one or more tranches during the current fiscal year.
Market analysts have pointed out that the partnership between Jio and Bharti Airtel is expected to capture approximately 81 percent of the adjusted revenue market share by FY25. This forecast suggests an increasingly challenging environment for Vodafone Idea in the upcoming quarters and underscores the urgency for the third-largest carrier to expedite the launch of its 5G services. CLSA analysts stated in a note, “Vodafone Idea’s delayed 5G rollout could result in further market consolidation with leading operators RJio and Bharti, who are actively expanding their 5G services. These top two operators currently command a combined 77 percent share of the sector’s revenue, a figure we anticipate will rise to 81 percent by FY25CL. Our outlook remains positive for RJio and Bharti.”
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Recently, the Telecom Regulatory Authority of India (TRAI) reported that Jio surpassed Airtel in terms of revenue market share (RMS) during the fourth quarter of the fiscal year 2023. Jio Infocomm witnessed a significant increase of 13 basis points (bps) in its gross revenue market share, reaching 41.7 percent between January and March 2023. Airtel’s RMS remained unchanged at 36.5 percent, while Vodafone Idea experienced a decline of 42 bps, bringing its RMS down to 16.6 percent.
By prioritizing an offshore bond issue, Bharti Airtel aims to optimize its financial position, streamline its debt structure, and position itself strongly in the competitive telecom market, particularly as the industry gears up for the deployment of 5G technology.
About Bharti Airtel:
Bharti Airtel Limited, widely recognized as Airtel, is an Indian telecommunications services company headquartered in New Delhi. With operations spanning across 18 countries in South Asia, Africa, and the Channel Islands, Airtel has established itself as a prominent multinational corporation.
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