Singtel is likely to raise its stake in Bharti Telecom, the largest single shareholder in Indian operator Bharti Airtel, to more than 50 per cent, The Economic Times (ET) reported.
If it goes ahead, the move will prove significant as Bharti Telecom will be reclassified as a foreign-owned entity, which will have an effect on operator Bharti Airtel’s ownership status.
ET reported Bharti Telecom currently holds a 41 per cent stake in Bharti Airtel, but it is classified as a domestic shareholding as the Sunil Mittal family has a 52 per cent holding.
Singtel’s stake in Bharti Telecom currently at 48 per cent: if it increases this to the mooted 50 per cent mark, there will be a reclassification of the holding company as a “foreign” investor.
Bharti Telecom’s holding in Bharti Airtel, which stands at 41 per cent would therefore be considered non-domestic equity, and means overseas holding in the operator could rise from 43 per cent to 85 per cent.
Under regulatory rules, any overseas ownership between 50 per cent and 100 per cent must be given the green light by the government.
For Bharti Telecom, a source told ET additional investment from Singtel could help it to reduce some debt.
The company is also reportedly aiming to get approval to be 100 per cent non-domestically owned, allowing for further increases in holdings and investment.
Singtel currently holds a 35 per cent direct stake in Airtel.