Billionaire Mittal Sells $952 Million Stake in India Tower Unit

  • Group led by KKR and CPPIB buys stake in Bharti Infratel
  • Airtel sold 10.3% in Bharti Infratel for 325 rupees apiece

Bharti Airtel Ltd. raised $952 million selling a stake in its tower unit as India’s largest carrier looks to pare debt as competition intensifies in the world’s second-largest smartphone market.

A group of investors led by KKR & Co. and Canada Pension Plan Investment Board bought over 190 million shares, or 10.3 percent of Bharti Infratel Ltd., for 61.93 billion rupees ($952 million), or 325 rupees a share, Airtel said in a stock exchange filing. Airtel, controlled by billionaire Sunil Bharti Mittal, will use the proceeds to pare debt, it said in the statement.

Billionaire Sunil Mittal

Photographer: Anindito Mukherjee/Bloomberg

Indian carriers have struggled to pare debt after a price war sparked by the entry of India’s richest man prompted operators to slash tariffs and consolidate. A planned combination of Vodafone Group Plc.’s Indian unit with Idea Cellular Ltd. will topple Airtel as the dominant mobile-phone operator in the nation.

“Bharti had been considering selling a controlling stake in the venture, but the announced consolidation between Vodafone and Idea knocked the stock off its highs,” said Chris Lane, an analyst at Sanford C. Bernstein in Hong Kong. “So while it’s a step in the right direction in reducing debt, we infer the smaller deal means Bharti has decided to wait for the price of Infratel to correct before selling a larger stake.”

Bharti Infratel gained 1.9 percent to 318.4 rupees at 11:37 a.m. in Mumbai, its biggest jump in more than three weeks. Airtel added 0.5 percent. 

Airtel last month agreed to acquire the local business of Norwegian carrier Telenor ASA.
Airtel has about 974 billion rupees of debt, according to company filings. A better capital structure will also help Airtel take on billionaire Mukesh Ambani’s Reliance Jio Infocomm Ltd., which is offering free calls and since last year.