Bharti Airtel’s huge Rs 21,000 crore rights concern will open for investors on October 5 and close on October 21, the organization mentioned in a regulatory filing on Wednesday. Telecom big Airtel is hunting to raise funds to accelerate investment primarily in the mobile small business as it appears to expand its marketplace share. The organization is also hunting to use these funds to roll out 5G, fibre backhaul, and step up information centre investments. The record date for the rights concern has been set as September 28. Bharti Airtel had announced the Rs 21,000 crore ideal concern last month. Bharti Airtel stock is trading with gains today, hitting an intra-day higher of Rs 735 per share.
Bharti Airtel Rights Issue: All you will need to know
-Bharti Airtel’s Board of Directors on Wednesday authorized promoting upto 39,22,87,662 Rights Equity shares for an quantity aggregating upto Rs 20,987.39 crores.
-Investors can subscribe to the Rights Issue at a fixed cost of Rs 535 apiece, a 37% discount to the existing cost of Bharti Airtel’s shares.
-At the time of application to the Rights Issue, investors will have to only spend an quantity of Rs 133.75 per share whilst the remaining Rs 401.25 will be collected in two separate instalments.
-The organization has decided on a rights entitlement ratio of 1:14. Hence, investors will be eligible for 1 rights entitlement for each 14 equity shares of Bharti Airtel.
-Bharti Airtel’s promoters will also subscribe to the rights concern of the organization and will bid for any unsubscribed portion of the concern.
-Similar to the Reliance Industries rights concern, the shares issued to investors in the Bharti Airtel concern will be converted to partly paid-up shares and listed on the bourses separately.
Rights entitlement
For investors who do not exercising their rights entitlement, the identical could be offloaded in the Rights Renunciation window which typically opens for trading in a week post the record date, Abhilash Pagaria of Edelweiss Alternative Research mentioned in a note earlier. Rights Entitlement (RE) are issued in a related ratio to the rights concern to eligible investors. SEBI enables investors to trade their RE for a cost.
Earlier this year, Zerodha’s Nithin Kamath told TheSpuzz Online that clients of the discount brokerage firm lost Rs 10 crore in expired Rights Entitlements by not applying for shares. The cost of the RE is determined by the marketplace based on the discount from the existing marketplace cost of the safety.
Airtel share cost efficiency
Since Bharti Airtel announced its Rs 21,000 crore rights concern the stock has jumped more than 17% to now trade at Rs 735 per share, up from Rs 600 at the finish of last month. Analysts had reiterated positive calls for Bharti Airtel soon after the rights concern announcement. Domestic brokerage and investigation firm ICICI Direct had advised investors to obtain Bharti Airtel and also subscribe to the rights concern of the organization.