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Bharti Airtel’s stake sale in Bharti Infratel credit positive, says Moody’s

August 10, 2017

Bharti Airtel recently completed its secondary stake sale of 67.53 million shares, or 3.7 per cent of stake in Bharti Infratel Limited through its wholly-owned subsidiary, Nettle Infrastructure for Rs 25 billion.

According to Moody’s, Bharti Airtel’s stake sale is a credit positive. However, this sale is not expected to have any immediate effect on its Baa3 issuer and senior unsecured debt ratings and negative outlook. The stake sale is consistent with the management’s commitment to strengthening its balance sheet and reducing debt.

Moody’s further estimates that even if all proceeds are used for debt reduction, the impact on leverage is limited. Moody's expects Bharti's profitability to remain under pressure over the next four quarters. Upwards ratings pressure is unlikely considering the negative outlook. However, the outlook could be revised to stable if Bharti's overall credit profile strengthens.

Earlier this year in March Bharti Airtel had sold a 10.3 per cent stake in Bharti Infratel for a sum of nearly Rs 61 billion.


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