Airtel to buy back 3.58 crore shares; sets aside ₹1,434 crore

Country’s largest telecom player Bharti Airtel on Wednesday announced that the company proposes to buyback shares at ₹400 per share and would set aside as much as ₹1,434 crore for this purpose.

About 3.58 crore equity shares are proposed to be bought back, which involved 0.90 per cent of the equity capital of the company, it said.

Industry sources say that buyback is being proposed in the wake of the company’s market price not truly reflecting the fundamentals of the company.

Some also see this move by Airtel board gearing up to emerge as a much bigger fish in the telecom space, since the entry of Reliance Jio is expected to see many smaller players exit.

“This will be subject to the regulatory and other approvals, if any,” Airtel said, adding that the board has constituted the Committee of Directors to finalise other terms and appointment of intermediaries for the buyback and administer the buyback procedure.

Shares of Airtel closed at ₹373.15 on the BSE on Wednesday, up 3.54 per cent from the previous close.

The company said its board has also proposed a final dividend of ₹1.36 per share (face value of ₹5 per share) for the financial year ended March 31, subject to approval by the shareholders.

Meanwhile, the company reported consolidated net profit of ₹1,290 crore for the fourth quarter ended March 31, up three per cent, compared with ₹1,255 crore in the same quarter last year.

The consolidated revenue also rose eight per cent to ₹24,960 crore during the quarter against ₹23,016 crore in the corresponding period last year, the company said.

For the full year, the company reported consolidated net profit of ₹5,484 crore, up six per cent compared with ₹5,183 crore in the previous financial year. Annual consolidated revenue also rose by five per cent to ₹96,532 crore from ₹92,039 crore, it said.

“Our focus on network and customers has resulted in a strong year of 12.4 per cent year-on-year growth. Solid execution has resulted in an acceleration of revenue market share even as our non-mobile businesses continue to grow smartly and now contribute materially to the overall Airtel growth story,” Gopal Vittal, Managing Director and Chief Executive Officer (India and South Asia), Airtel, said.

The year-on-year mobile data growth continues to lead, with traffic and revenues up 69.4 per cent and 44.5 per cent, respectively, he said, adding that voice volumes have also increased 10.8 per cent – the fastest growth in the last 18 quarters.

“With the proposed spectrum acquisitions from Videocon and Aircel, we will be the only pan-India 2G/3G/4G operator and best placed in the Industry to strengthen our leadership position,” Vittal added.

Its India revenues for the quarter grew by 12 per cent YoY at ₹18,328 crore, adjusted for the impact in reduction of termination rates. Mobile data revenues at ₹3,357 crore grew by 44.5 per cent YoY in India, led by increase in the data customer base and traffic, it said.

Airtel added that mobile data revenue now contributes to 23.3 per cent of mobile India revenue versus 17.6 per cent in the year-ago quarter.

Data average revenue per user has moved up ₹21 to ₹196 during the quarter, led by 31 per cent increase in usage per customer.