Bharti Airtel Ltd., Vodafone India Ltd. and Idea Cellular Ltd. sim card packs are arranged for photograph in Mumbai, India (Photographer: Dhiraj Singh/Bloomberg) 

Qatar Investment Authority To Infuse $200 Million In Bharti Airtel’s Africa Unit

Bharti Airtel Ltd. will raise $200 million, or Rs 1,400 crore, from Qatar Investment Authority to pare debt at its Africa unit as it plans to list the business in the continent.

This is the second fund infusion by India’s No. 2 telecom operator in its profitable Africa business which has a debt of close to $3.75 billion. Billionaire Sunil Mittal-controlled carrier recently infused close to $1.25 billion by selling stake to Warburg Pincus, Temasek, Singtel, SoftBank Group International and two others.

Based on the equity value of the earlier infusion, QIA should own a little more than 4 percent stake in the African unit, according to BloombergQuint’s calculation.

Bharti Airtel plans to list its African unit at a time it’s locked in a bruising tariff war in India, the world’s second-largest telecom market. Reliance Jio Infocomm Ltd., controlled by India’s richest man Mukesh Ambani, drove down profits of rivals first through free services and then rock-bottom pricing. That pushed smaller operators out of business and forced others to merge.

The competition also increased Bharti Airtel’s debt to more than Rs 1 lakh crore and increased its leverage. The company spent a little more than Rs 7,600 crore on capital expenditure in the quarter ended September and will spend Rs 10,000 crore more in the rest of 2018-19. The carrier has been selling assets outside the India wireless business to lower debt—it offloaded stake in its tower arm Bharti Infratel Ltd. and DTH business.

Also read: This Is How Sunil Mittal Can Reduce Bharti Airtel’s Huge Debt Pile

Africa Performance

Bharti Airtel continues to gain footing in Africa even as its India business remains under pressure. It has more than 9.4 crore subscribers and an average revenue per user of close to Rs 200, higher than its India telecom operations.

The continent contributed more than Rs 21,000 crore in sales in the 12 months ended September. Net profit rose on the back of cost cuts, which reflected on its margin. Ebitda margin from Africa stood at 37.1 percent in the September quarter.