Airtel Buys Warburg Pincus’ 20% Stake in Bharti Telemedia (₹3126 Cr)

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In an attempt to provide One Home strategy for DTH customers, Bharti Airtel acquired a 20% stake in Bharti Telemedia. The total valuation of this purchase is Rs 31,260 million (Rs 3,126 crore).

To the unaware, Bharti Airtel is the third leading service provider in the Indian DTH business after Tata Sky and Dish TV. It was in December 2017, Wargburg Pincus affiliate agreed to acquire a 20% equity stake in Bharti Telemedia Limited.

With this Bharti Airtel communicated the decision to stock exchanges. As per the official statement, the amount will be discharged through equity shares and cash. The issuance of about 36.47 million equity shares of Bharti Airtel at a price of ₹600 per share and up to ₹1,037.80 crores in cash will be done.

An Integral Part of Airtel’s One Home Strategy:

The company feels that this step will facilitate the unlocking of value for shareholders.

Speaking on this occasion, Mr Harjeet Kohli, Group Director, Bharti Enterprises, said, “DTH is an integral part of our Homes strategy. And this transaction is another step towards simplifying the shareholding of our customer-facing businesses providing structural flexibility and ease of implementation.”

He also retaliated that the complete ownership of Bharti Telemedia will allow Airtel to promote the “One Home Strategy” thereby providing varied solutions to its subscribers.

Commenting on this Vishal Mahadevia, MD and head of Warburg Pincus India, said, “Airtel was one of the earliest and most profitable investments for Warburg Pincus in India. We are delighted to be back as partners in Bharti Airtel through this transaction.”

Airtel Spending Cash Elsewhere:

According to trade analysts, the Bharti Airtel’s buyback of 20% stake is a big surprise when the telecom companies are getting ready for the upcoming spectrum auction. Airtel’s spending cash elsewhere ahead of spectrum auction is indeed a brave decision from Mittal group.

The bid to have full control of DTH is a clear signal to offer “One Home” bundled product. Undoubtedly, this transaction is a win-win for both parties making Airtel a perfect competitor against Reliance Jio.

So, what is your opinion on Airtel’s buyback of 20% stake from Warburg Pincus? Share your thoughts.

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