rewrite this title and make it good for SEOBharti Telecom to raise Rs 11,150 crore through NCDs

Mumbai: Bharti Telecom, a key holding company of the Bharti Group for its telecom business, is raising ₹11,150 crore through a new issuance of non-convertible debentures (NCDs), mainly to refinance existing high-cost debt, said people close to the development.

The issuance is divided across various tenors and series. The annual coupon rate for the debentures will range from 8.25% to 8.9%, with payments to be made annually and upon maturity for each respective tranche.

The coupons represent a spread of up to 2 percentage points over risk-free rates.

The debt will be issued in seven tranches, with anchor investors including major financial players such as JP Morgan, ICICI Prudential Mutual Fund, Barclays Merchant Bank Singapore, Nippon India Mutual Fund, SBI Mutual Fund, Kotak Mahindra Mutual Fund, Axis Mutual Fund, and Franklin Templeton Mutual Fund. Barclays and Standard Chartered Bank have been appointed as arrangers for the issuance.

“BTL is raising the money via bonds to essentially refinance high-cost debt, which will enable it to save on annual interest payouts and reduce borrowing costs,” a person aware of the matter told ET.The debenture issuance has received a CRISIL AA+ rating, and the issue is scheduled to open on November 4. Bharti Telecom, largely backed by dividends from Bharti Airtel has no other direct revenue streams.Spokespersons of Standard Chartered Bank and Barclays did not immediately respond to requests for comment. At press time, ET’s queries to Bharti Telecom remained unanswered.Bharti Telecom (BTL) holds a 39.13% stake in Bharti Airtel. It is the largest shareholder of the Sunil Mittal-led telco which commands a market capitalisation of over ₹9.3 lakh crore. The Mittal family and Singapore Telecommunications (Singtel), in turn, own 50.56% and 49.44% respectively in BTL.

Bharti Telecom’s debt levels have risen in recent years, totalling ₹24,290 crore as of September 30, 2024, primarily due to increased stakes in Bharti Airtel. In recent years, BTL has increased its stake in Airtel while SingTel’s effective holding in the telco has declined to around 29%.

According to CARE Ratings, Bharti Telecom’s financial flexibility is underpinned by the strong reputation and resourcefulness of its promoters, the robust credit profile of its flagship business, Airtel, and the significant market value of its stake in the telco.