Telecom major Bharti Airtel has received regulatory approval for raising foreign direct investment (FDI) limit to 100 percent in its subsidiaries. Exchanges have been informed by the company that it is going to start the process of revising its FDI with immediate effect. Experts believe that the approval has opened gates for influx of investment into the company.
The development can result in inflows of around $600-700 million for the company, according to Edelweiss Alternative Research.
Bharti Airtel had recently secured approval from the Department of Telecommunications (DoT) to raise foreign investment limit to 100 per cent in three of its subsidiaries—Bharti Hexacom, Bharti Telecsonic and Bharti Teleport.
“Airtel has its full approvals in place, but that also means the subsidiaries below need to have their own approvals and that while we see nothing extraordinarily to worry about but has a process attached to it including our DTH business, Airtel Payments Bank and other subsidiaries,” Harjeet Kohli, Group Director of Strategy and Business Development at Bharti Airtel Ltd., had said in the company’s conference call for the quarter ended September 2020. This comes after the mobile operator received approval from the Reserve Bank of India and Foreign Investment Promotion Board to increase FDI up to 74 per cent in its payment bank arm, Airtel Payments Bank.
The MSCI adjustment date (of Bharti Airtel’s weight in the MSCI Emerging Market Index) is February 28, 2021, Edelweiss Alternative Research said. NSDL, the brokerage said, should soon update its foreign investment limits as MSCI only looks at NSDL depository data while making adjustments, it said. According to a Bloomberg Quint report, brokerages like ICICI Securities, BNP Paribas, and CLSA are bullish on Bharti Airtel owing to its stable market share and subscriber additions.