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After investing in the Adani Group and some other companies in India, the US-based investment firm GQG Partners has acquired a significant chunk in Bharti Airtel, buying 0.8 per cent direct stake from Singtel for S$950 million ($712.5 million).
Singapore Telecommunication said in a regulatory filing that it sold 0.8 per cent stake in its regional associate, Airtel, to GQG Partners, the gain from the sale being S$700 million. It sold 49 million shares at ₹1,193.7 each. With this sale, its stake in Airtel stands reduced to 29 per cent, worth around S$33 billion.
Rajiv Jain-led GQG Partners stormed into the Indian investor consciousness in March 2023 when it picked up small chunks in Adani Group companies, whose shares were bludgeoned after short-seller Hindenburg Research’s allegations against the group. It has invested over $4 billion in the group, and the value has more than doubled, according to reports.
It has invested in other Indian companies such as JSW Energy, Patanjali Foods, IDFC First Bank and GMR Airports Infrastructure, the total value of its India portfolio at around $22 billion. Recently, Jain told a television channel that the Indian market had a good runway with a three-year time frame.
Singtel unlocking value
Singtel, which has been an investor in Airtel for over two decades, said that the transaction was the latest in the group’s capital recycling efforts to unlock value from its assets, bringing the total capital recycled to S$8 billion since its strategic reset in 2021.
“This has allowed the Group to fund the growth of its data centre and IT services, as well as reduce net debt by S$3.2 billion as of end-September 2023. The Group has also returned S$0.8 billion in special dividends to shareholders from capital recycling, contributing to cumulative dividends of S$5.2 billion paid out to shareholders since April 2022,” it added.
The group was in a strong position to execute its disciplined capital approach of balancing investing for higher growth and delivering strong, sustainable returns for its shareholders, said Singtel Group CFO Arthur Lang.
“We will look at actions to improve total shareholder returns via sustainably growing dividends and share price appreciation. We believe the current share price does not reflect the intrinsic value or growth potential of the Group,” he added.
Pointing out that Airtel was seeing steady growth across its businesses, he said he believed there was more room for growth “given India’s accelerated digital transformation and we intend to stay invested for the long term while working with Bharti Enterprises to equalise our effective stake in Airtel over time”.
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