Warburg Pincus affiliate, Lion Meadow Investment, has sold a 0.3% stake in telecom operator Bharti Airtel Ltd through a block deal for Rs 1,649 crore. The affiliate sold 1,90,00,000 shares at Rs 868 apiece. The selling price was at a marginal discount to the previous closing price. Despite the stake sale, Airtel’s stock ended nearly 1% higher at Rs 878.75 due to strong institutional buying. Several funds including American Funds Insurance, New World Fund, EuroPacific Growth Fund, Capital World Growth and Income Fund have picked up stake in the company.
Brokerage CLSA has given a buy rating on Bharti Airtel with a target price of Rs 1015. According to CLSA, the African business of Airtel is growing fast, has a high margin, and could get a separate listing. The ability to add value is significant and the management is committed to a separate listing. Based on the CY21 investment, the implied valuation is 50% of the current Africa market cap, which accounts for almost 30% of Bharti’s console operations with 56% ownership.
In the March quarter, Airtel reported a 50% year-on-year (YoY) rise in consolidated net profit to Rs 3,006 crore. Consolidated revenue grew 14.3% YoY to Rs 36,009 crore due to strong and consistent performance across business segments. For FY23, the telecom operator reported a 19.4% growth in revenue to Rs 1.39 lakh crore and a 96% growth in net profit to Rs 8,346 crore.
