SingTel Offloads 0.8% Stake In Bharti Airtel To GQG Partners

SingTel has been gradually selling its shares in Airtel, including a direct 3.3 per cent stake sale for 2.54 billion Singapore Dollars in 2022

Singapore Telecommunications announced on Thursday that it has divested a 0.8 per cent stake in India's Bharti Airtel for 950 million Singapore Dollars (approximately $711 million) to US investment firm GQG Partners. This move is part of Southeast Asia's largest telecom operator's ongoing efforts to reallocate capital, totalling 8 billion Singapore Dollars since its strategic reset in 2021, according to the news agency Reuters report.

Through its unit Pastel, SingTel sold 49 million shares, equivalent to 0.8 per cent of the outstanding shares in Airtel, thereby reducing its stake in Airtel by 0.8 percentage points. Post-transaction, SingTel's effective stake in Airtel will be 29 per cent, valued at around 33 billion Singapore Dollars.

SingTel has been gradually selling its shares in Airtel, including a direct 3.3 per cent stake sale for 2.54 billion Singapore Dollars in 2022. The group anticipates recording a gain of 700 million Singapore Dollars from this divestment without specifying the difference with the divestment price. SingTel has been consistently striving to enhance shareholder returns, as evidenced by its decision to increase dividends to between 70 per cent and 90 per cent of underlying net profit in November last year.

Analyst Sachin Mittal from DBS commented, "Looks like a good move in terms of timing with Bharti Airtel share price up 56% in one year even exceeding consensus street target price of 1,175 rupees,” reported Reuters.

"Singtel's market cap is around only S$39 billion while the value of its stake in Bharti alone is 33 billion Singapore Dollars. This also signals the true value of assets held by Singtel as the market is under-valuing Singtel's stock price by giving over 45 per cent holding company discount," Mittal added.

SingTel's finance chief, Arthur Lang, also remarked that the current share price of the company "does not reflect the intrinsic value or growth potential of the group." SingTel shares are presently trading 0.4 per cent higher at 2.35 Singapore Dollars apiece, while Airtel shares are up 1.1 per cent at 1,207.4 rupees per share.