Mumbai | Kolkata: is set to raise up to Rs 3,000 crore in short-term debt from the local money market, to make the initial payment to the government for the 5G airwaves it bought in the recently concluded auction, three people aware of the matter said.
The telecom operator is selling commercial papers (CPs) with maturities of up to 12 months, the people said.
Mutual Fund is said to have agreed to subscribe to more than Rs 1,000 crore of Airtel’s debt and the country’s largest fund house will likely opt for CPs maturing in February next year at 6.53%, they said.
The deadline to make the first instalment of spectrum payment is Wednesday.
is also in discussions with a clutch of public sector banks to raise around Rs 1,600-1,700 crore, a person aware of the cash-strapped operator’s plans said but didn’t provide details.
Airtel, SBI MF and Vodafone Idea didn’t respond to request for comment till press time Tuesday.
Sunil Mittal-led
bought spectrum worth Rs 43,084 crore in India’s first 5G auction that ended earlier this month. If Airtel opts to pay for 5G spectrum in 20 equal annual instalments, its first tranche would be Rs 3,848 crore, to be paid to the Department of Telecommunications by August 17 (Wednesday), according to notices put up on DoT’s website. It is widely expected that the carrier would opt for such a payment mechanism.
“Airtel is in talks with leading mutual funds, and global and local banks as they have approached large institutions,” one of the people told ET.
The short-term loan is expected to be refinanced at the end of the maturities, the people said.
Barclays, Citi, BNP Paribas,
and other large public and private banks have been approached by the telco. Barclays, and Citi declined to comment, while SBI didn’t reply to ET’s queries.
Vodafone Idea, meanwhile, has to pay Rs 1,679 crore as the first instalment.
Shares of Airtel closed 0.85% lower at Rs 703.80 on Tuesday on the BSE, while those of Vodafone Idea ended 1.49% higher at Rs 8.84.
Airtel has announced plans to roll out 5G services using the non-standalone mode and is targeting a pan-India rollout by March 2024. The company’s chief executive, Gopal Vittal, recently said 5G coverage plans were ready for some 5,000 cities and towns.
Market leader Jio was the biggest spender in the recent 5G auction, buying airwaves worth Rs 88,078 crore, followed by Airtel and Vi that spent Rs 18,799 crore.
“Airtel keeps raising funds across business purposes as money is fungible,” another person cited said.
A banker said the telco was a clean credit as it had the potential to grow.
India Ratings graded Airtel’s proposed CPs at A1+, a standard rank. “Airtel’s spectrum footprint would strengthen through the acquisition of the right to use the 5G spectrum bands,” the ratings firm said on July 27.
