Bharti Airtel share price - brokerages bullish after board approves Rs 21,000 cr fundraising plan - Check what is recommended

Brokerages are bullish on Bharti Airtel shares after the company board on Sunday approved the Rs 21,000 cr fundraising plan. The second-largest telecom company on August 29, 2021, said in a filing that its Board of Directors has approved to raise capital up to Rs 21,000 crore by issuing equity shares of the face value of Rs 5 each of the company.

It further added that the board approved the right issue price to be set at Rs 535 per fully paid-up equity share, including a premium of Rs 530 per equity share.

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In this regard, UBS says Rights Issue will strengthen the balance sheet ahead of 5G investments including spectrum auction.

The brokerage also said that the net debt-to-EBITDA to reduce further to 1.8x by FY24 as against 2.6x at present. It maintains a Buy rating with a target of Rs 655 per share.

Similarly, even CLSA maintained a Buy stance with a target price of Rs 780 per share, given the company's commendable market share performance.

The brokerage said, Rights Issue and Call options create headroom, keeping gearing comfortable, especially in the event the government advances 5G spectrum auction.

Jefferies too maintained a Buy call with a target price of Rs 685 per share, as the fund-raising plan of Rs 21000 crore rights issue bodes well. the brokerage says, the company may require capital for 5G auctions over the next three years.

It added, the issue at a 10 per cent discount to the current market price rewards existing shareholders and said it is a reminder that standalone FCF generation is weak.

Airtel has been a key player for brokerages since the ongoing concern with Vodafone and the company's positive news such as rejig in entry-level tariff plan, various pacts with other tech companies for 5G solutions.