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Bharti Airtel shares rise 2% on Rs 21,000-crore rights issue plan

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The rights issue will open on October 5 and close on October 21, while September 28 is set as the record date.

Bharti Airtel shares rise 2% on Rs 21,000-crore rights issue plan
Shares of Bharti Airtel rose as much as 2 percent on Thursday on the back of the telecom operator’s plan to raise Rs 21,000 crore through a rights issue.
At 12:26 IST, the stock was up 0.7 percent at Rs 732.05.
The scrip has surged over 43 percent year to date (YTD), thereby outperforming the benchmark Nifty 50 that has gained 27 percent during the same period.
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The rights issue will open on October 5 and close on October 21, while September 28 is set as the record date for rights entitlement in the issue. The rights entitlement ratio entails one equity share for every 14 shares held by eligible shareholders as on the record date.
Bharti Airtel will issue 392.29 billion shares at a price of Rs 535 per share, including a premium of Rs 230.
“Bharti Airtel's rights issue at Rs 535 a share is attractively priced considering the current market price of around Rs 730. The recent telecom package declared by the government addresses most of the issues that the industry has been facing for some time now. India's telecom industry is now practically a duopoly with Ril Jio and Bharti Airtel dominating the industry. Bharti's 35 crore customers, growing steadily, and the launch of 5G shortly bode well for the company in the years ahead,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Sevices.
The proceeds from this rights issue will be used to invest in 5G technology.
Further, Singtel, that holds 14 percent stake in Bharti Airtel, said that it will subscribe to its portion of the rights issue, costing it $405 million. Singtel’s participation in the rights offering reflects its confidence in Bharti Airtel's growth prospects.
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