Bharti Airtel following ICICI Bank tune, Singapore arms picking more stake

India’s leading telecom operator, Bharti Airtel is divesting its 4.99% stake to Singapore government’s investment arm Temasek Holdings for a consideration valued at Rs.8200 crore at current market price making it the largest PE deal ever in India.

Meanwhile, Vodafone would dilute its stake from 10% to 4.4% by selling 5.6% stake to Bharti Enterprises. Bharti stands to gain from this possible back-to-back transaction as it buys Vodafone’s 5.6% stake for $1.6 billion and sell 5% stake to Temasek for around $2 billion.

This transaction would imply that Bharti Enterprises 45% stake in Bharti Airtel would increase marginally from current 45% and the Temasek-Singapore Telecom combine’s holding (Temasek is the largest shareholder in Singtel) will go up to 36%.

Though Singapore Telecommunications had the first right buy shares from Temasek Holdings of Bharti Airtel. It the deal goes through, it would be Temasek’s second investment in a telecom company in India after it bought 9.9% in Tata Teleservices.

The deal would also portray the attractiveness of top Indian companies for large Singapore based PE players as is evident from investment by these players in the recently concluded ICICI Bank FPO.