New Delhi, May 26 (PTI) The secondary equity sale by promoter company Bharti Telecom Ltd (BTL) in Airtel is more of a deleveraging exercise and the sector fundamental remains attractive, Credit Suisse has said in a latest note.
Bharti Telecom is raising USD 1 billion (almost Rs 7,600 crore) by selling shares in telecom firm Bharti Airtel through a block deal on Tuesday at Rs 558 apiece, to become debt-free. Bharti Telecom plans to dilute 2.75 per cent stake through the secondary placement.
'We see this stake sale by BTL a positive as it will make the promoter entity debt-free, in turn improving the flexibility for any support to Airtel in future,' IIFL Securities said.
The promoter group will continue to hold 56.3 per cent in Airtel, it said.
'Secondary equity sale by Bharti Telecom is more of a deleveraging exercise, in our view; sector fundamental remains attractive,' Credit Suisse said.
Credit Suisse added that it expects Bharti Airtel to benefit from ongoing market repair in the sector.
Another report by Jefferies said that while a stake sale by promoters is usually construed negatively by investors, in this case the stake sale is mainly to de-leverage Bharti Telecom and, hence, not a negative in its view. PTI MBI HRS