Airtel rights (RE) gained 2.45% Thursday to close at Rs 209.15 on BSE, a premium of nearly 33% over its current intrinsic value. REs were listed at Rs 191 on Tuesday against the intrinsic value of Rs 146.10 at the time. The intrinsic value is the difference between the issue price of the rights and the last negotiated price and, therefore, varies from day to day.
Each RE allows its owner to subscribe to a partially paid Airtel share by paying Rs 133.75 before October 21. ROEs not renounced or exercised by October 21 at the latest will lapse.
Retail investors are allowed to buy or sell REs between October 5 and October 14 on an exchange basis on a special exchange window. Shareholders who do not wish to subscribe to the capital increase can sell their ROEs at the special window.
Airtel did not respond until press time Thursday to questions from ET about investors’ response to the rights issue. ICICI Pru MF and HSBC MF declined to comment, while questions to SBI MF, Kotak Mahindra MF, Aditya Birla MF, HDFC MF and Nomura remained unanswered at time of publication.
Sanjiv Bhasin, director of IIFL Securities, expects “Airtel’s ongoing rights issue to see a fair amount of oversubscription with large institutional investors betting on it, especially as the telephone company is in an ideal position after the recent government-backed telecommunications relief program and with ARPUs (average revenue per user) reaching a low â€.
Airtel shares closed up 0.17% at Rs 692.55 on BSE on Thursday. The issue of rights at a price of Rs 535 per share represents a discount of nearly 23% from the closing price of the share on Thursday.
The rights of Bharti (RE) listed on Tuesday were blocked at the upper circuit of 40% of Rs 204.50 on BSE. The RE opened at Rs 191, a premium of 31% over its intrinsic value of Rs 146.10.
Subscribers to the rights show – which started on October 5 and ends on October 21 – must pay 25% of the demand price and the remainder in two additional calls, as may be decided by the board of directors. administration of Bharti Airtel, but within 36 months. Airtel shareholders will receive one share for 14 shares held in the telecommunications company at Rs 535 per unit, which implies a 7% dilution. 4G network and prepare for the next auction of 5G waves.
The promoter group of Airtel – the Mittal family and SingTel of Singapore – owns nearly 56% of the company, with the remainder held by the public. The Mittal family directly and indirectly owns approximately 24.13%, while SingTel holds 31.72%. The promoter group will subscribe collectively to the full extent of their cumulative rights, or in proportion to their interests in the telecommunications company. They will also buy the unsubscribed shares in the issue.
This is Airtel’s second rights issue in just over two years. He had raised Rs 25,000 crore via a rights issue in May 2019.
