Fundraiser, Airtel 5G will help drive Profitable Growth: Sunil Mittal

On Monday, Sunil Mittal, during an earnings call, said that the fundraising, along with Airtel 5G, will fuel investments for the telco. He also said that this will translate into growth.

Airtel 5G Important for Profitability: Sunil Mittal

He further said, "we are conscious of our current leverage ratio which while we believe is comfortable; however, it is not a sentiment shared by some or all. Conscious of the same and not further loading the company with any additional debt, especially as the above opportunities need their outlays, the Board approved the fresh capital raise which will allow the company to have a better leverage ratio, stronger and earlier access to building new market opportunity across, 5G, fiber and homes, and importantly give us the needed elbow room and fuel, to fearlessly accelerate its mission".

After a board meeting on Sunday, Bharti Airtel has finalized plans to raise Rs 21,000 crore by rights issue. Mittal said that the rights issue has been designed on a deferred payment system. That allows the telco to call upon money as and when required, while keeping a close eye on utilization.

He added, "the capital will also help Airtel accelerate our rollout of fiber to prepare the network in time for 5G rollout and also have millions of additional home passes of FTTH for home broadband". The company will also look to channel capex in its Data Centers business, as more hyperscalers seek the country to install new capacities.

He added that Airtel 5G will allow the telco to deliver the next-gen network to its customers; the telco will target enterprises as well, given the new use cases for the same. Mittal said that the telco will seek to bring Airtel 5G to the market as soon as possible. He said that 5G-enabled handsets have already hit the Indian market; he said that by the time Airtel 5G launches, the industry will have enough phones to make it commercially viable.

Address the Distress in the Telecom Sector: Mittal

Mittal said that the telco has been asking the government to address the issues that continue to slow investments. He said that since the sector offered either zero, or negative, return, potential investors are put off from investing.

Talking about the levies, he added, "for every Rs.100 of revenue, Rs.35 go in various forms of levies. We hope that as we step up and do our part, the government will also favourably look at some of the genuine demands of the industry enabling a multiplier effect and positive outcome".

He added that Airtel has the chance to lead for digital economy; he also added that the telco has the potential to take India into the "next phase of growth".

"We will do all this while also relentlessly improving our long-term financial sustainability, keeping conservative on leverage, backed by full support from the promoters...As rights entitlements are pro-rata to the shareholding, the promoter and promoter group of the Company will collectively subscribe to the full extent of their aggregate rights entitlement," he said.

The promoter and promoter group will also subscribe to any unsubscribed shares in the Issue, he added.