The likes of ICICI Prudential MF, SBI MF, Kotak Mahindra MF, Aditya Birla MF, HDFC MF, HSBC MF, HSBC and Japan’s Nomura are among the big-ticket fund houses who have bid for shares in Bharti Airtel’s ongoing near Rs 21,000 crore rights issue, top bankers and industry experts aware said.
Airtel’s rights entitlements (REs) also gained 2.45% Thursday to close at Rs 209.15 on the BSE, a near 33% premium over its intrinsic value.
The REs had listed at Rs 191 on Tuesday against its intrinsic value of Rs 146.10. The intrinsic value is the difference between the price of fully-paid shares and the rights issue price.
Each RE entitles its owner to subscribe to one Airtel partly-paid share by paying Rs 133.75 before October 21. The REs not renounced or exercised on or before October 21 will lapse.
Retail investors are allowed to buy or sell REs between October 5 and October 14 on a trade-to-trade basis on a special trading window. Shareholders, who don’t wish to subscribe to the rights issue, can sell their REs on the special window.
At press time, Airtel did not reply to ET’s queries on investor response to the ongoing rights issue. ICICI Pru MF declined to comment, while queries to SBI MF, Kotak Mahindra MF, Aditya Birla MF, HDFC MF, HSBC MF, HSBC and Nomura went unanswered.
Sanjiv Bhasin, director at IIFL Securities, expects “Airtel’s ongoing rights issue to see a fair amount of over-subscription with large institutional investors betting on it, especially as the telco is in a sweet spot after the recent government-backed telecom relief package and with ARPUs (average revenue per user) having bottomed out”.
Airtel shares closed 0.17% higher at Rs 692.55 on BSE on Thursday. The rights issue priced at Rs 535 a share, works out to a discount of almost 23% to the Thursday closing price.