Bharti seeks government approval for raising fund via FDI

                          Foreign Direct Investment (FDI) plays an important role in the enhancement of fund for any company. Bharti Telecom,promoter of Bharti Airtel,has sought government approval for raising Rs 4900 crore from Singapore based Singtel and other foreign entities.It is a move that would make the country’s oldest private telecom operator a foreign entity.The fund infusion will enhance foreign stakeholding in Bharti Telecom to over 50 per cent that will make it a foreign-owned entity.At present, 52 per cent of the shares are owned by Sunil Mittal and his family.Bharti Telecom holds about 41 per cent stake in Bharti Airtel while foreign promoter entities old 21.5 per cent stake in the telecom firm.Public shareholders have around 37 per cent stake in the company.The department of telecom had rejected the FDI application of Bharti Airtel earlier this year.This was because of the reason that the company had not provided clarity on the foreign investor.

                           At present,the total foreign share holding is 43 per cent in Bharti Airtel.As the promoter,Bharti Telecom becoming foreign entity,foreign shareholding of the company will cross 84 per cent.The company in August had informed stock exchanges that Bharti Telecom in order to retire some debts may seek equity from its existing promoter group which may include overseas entity and Singtel in proportionate to its holding.

                          Bharti Airtel has said that even a marginal increase in foreign equity would take the foreign investment in Bharti Telecom above 50 per cent making it a foreign owned entity.They has already applied to raise FDI limit to 100 per cent in the company.Bharti Airtel board last week approved a proposal to raise USD 3 billion throughstake sale and debt papers as the company owes due of Rs 43,000 crore to the government.The company will offer for sale of equity shares or a combination of similar offers to raise USD 2 billion.Rest USD 1 billion will be raised through debentures and bonds.Bharti Airtel expects industry revenues to start growing again due to recent tariff hikes.Bharti Airtel believes that while its current debt levels are elevated,it remains under control.