Bharti Airtel rings on acquisition reports
Bharti Airtel gained 1.88% to Rs 322.75 at 13:09 IST on BSE on reports the company is set to buy a 70% stake for $900 million in Bangladesh's fourth-biggest telecom company Warid Telecom.
Meanwhile, the BSE Sensex was up 22.42 points, or 0.13%, to 16,899.58 On BSE, 7.71 lakh shares were traded in the counter as against an average daily volume of 26.81 lakh shares in the past one quarter.
The stock had hit a high of Rs 323.80 and a low of Rs 315.20 so far during the day. The stock had hit a 52-week high of Rs 495 on 19 May 2009 and a 52-week low of Rs 229.50 on 27 November 2009.
The large-cap stock outperformed the market over the past one month till 15 December 2009, rising 5.11% as compared to the Sensex's 0.17% rise. However it had underperformed the market in the past one quarter, falling 23.86% as compared to the Sensex's return of 2.57%
The company's equity capital is Rs 1898.42 crore. Face value per share is Rs 5.
The current price of Rs 322.75 discounts the company's Q2 September 2009 annualized EPS of Rs 24.20, by a PE multiple of 13.33
Meanwhile, a Bharti Airtel spokesperson, speaking to a news agency, declined to comment on a possible deal to buy Bangladesh's Warid Telecom adding that the company will keep evaluating international opportunities from time to time. He added that Bharti Airtel it is looking at acquisitions in the South Asian Association for Regional Cooperation (SAARC) region, especially in Bangladesh. The eight-member SAARC region includes Bangladesh, Bhutan, Maldives, Nepal, Pakistan, India, Sri Lanka and Afghanistan.
Cellular Operators Association of India data showed that Bharti Airtel retained the numero uno position adding 28 lakh users in November 2009 to reach a total of over 11.6 crore users. The company had added 27 lakh users in October 2009.
In late October 2009, Bharti Airtel unveiled its per second billing plan, 'Freedom Plan'. The subscribers of this plan will be charged one paise per second for all local and STD calls on Airtel networks while for other networks local and STD call charges will be 1.20 paise per second.
Meanwhile, the auction of radio bandwidth for third generation, or 3G, mobile phone services is on schedule, the union minister for telecommunications said recently. Earlier, the government had missed an 8 December 2009 deadline for inviting applications or inviting prospective bidders to participate in the proposed bandwidth auction for 3G mobile telephony services.
The department of telecom (DoT) is scheduled to launch electronic auctions on 14 January 2010 to allot four slots of bandwidth for 3G mobile phone services in most parts of the country, and three slots of bandwidth for broadband wireless Internet--or WiMax-- services.
On 10 December 2009, the Reserve Bank of India made a concession in the foreign borrowings policy for telecom companies seeking to fund their acquisition of 3G spectrum.
In November 2009, Singapore Telecommunications, or SingTel through its wholly owned subsidiary, Pastel, executed a conditional share purchase agreement with the Bharti Group to hike its stake in Bharti Telecom, promoter company of Bharti Airtel.
Under this agreement, SingTel will acquire additional 7.30 lakh shares in Bharti Telecom, which holds 45.30% stake in Bharti Airtel as at end September 2009.
Following this deal, SingTel's effective stake in Bharti Telecom will stand increased to 36.16% from the current level of 32.81% while its effective stake in Bharti Airtel will go up by 1.52% to 31.95%.
SingTel will make an estimated payment between Rs 1,807.3 crore and Rs 3,008.4 crore over a period of more than a year for this acquisition. The move will enable SingTel to maximize value of its existing businesses.
Bharti Airtel's net profit surged 43.1% to Rs 2296.94 crore on 7.6% rise in net sales to Rs 8901.66 crore in Q2 September 2009 over Q2 September 2008.
Bharti Airtel provides mobile telecommunication services in India. It also provides fixed-line, VSAT, Internet and broadband services.
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