On Wednesday, December 2, 2020, Bharti Airtel’s wholly-owned subsidiary Nettle Infrastructure Investments Ltd bought 133 million shares or 4.94 per cent additional stake in Bharti Infratel
for Rs 2,882 crore via block deals. With this acquisition by Nettle, the aggregate shareholding of Bharti (along with subsidiaries) has increased to 41.66 per cent in Infratel against 36.73 per cent, earlier. CLICK HERE FOR BULK DEALS DATA
"While Infratel will announce special dividend (of around Rs 18) in near term along with usual healthy dividend yield, we do not see any other positive trigger in the near term," ICICI Securities said in a note. It also does not change the status of board control, which will continue to be jointly between Airtel and Vodafone Group. No justification has been provided by the company. The increase in stake, therefore does not justify optimal capital allocation strategy, the brokerage added.
Meanwhile, the stock of Bharti Airtel was down 2 per cent to Rs 474, after hitting a high of Rs 488 in the early morning trade today.
Motilal Oswal Securities in a note said that the deal could be leverage neutral for Bharti Airtel as it would receive a cumulative Rs 250-300 crore dividend, excluding taxes, over the next two years against its investment of Rs 2,880 crore coming from part of the extra-ordinary dividend from the cash balance on Bharti Infratel’s balance sheet, and the annual profit after tax generation from the merged entity. "However, irrespective of the deal, its existing 36.73 per cent stake would have still received the dividend. So, the incremental amount for the additional around 5 per cent stake does not justify the risk," the brokerage firm said.
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