What is a Rights Issue? Bharti Airtel to raise Rs 21000 crore through Right Issue to open on October 5, 2021

The Board of Directors (‘Board’) of Bharti Airtel Ltd had earlier approved the rights issue of partly paid-up equity shares of the face value of Rs. 5 each (‘Rights Equity Shares’) at a price of Rs. 535 per rights equity share (including a premium of Rs. 530 per rights equity share) for an aggregate amount of up to Rs. 21,000 crores (‘Issue’) to the eligible equity shareholders of the Company in the rights entitlement ratio of 1 Rights Equity Share for every 14 equity shares held by eligible equity shareholders as on the record date.

What is a rights issue and how it works?

Under Company Laws, a rights issue is one of the many ways in which a company can raise additional capital when they need it. A rights issue gives investors the option, or a right to buy new shares of the company at a discount to the current market price.

Only existing shareholders of a company can participate in the rights issue. This means that instead of going to the general public at large, only the existing shareholders of the company can buy additional shares in the company if they so wish to.

Companies also declare a rights entitlement ratio when declaring a rights issue. For example, if a company declares an entitlement ratio of 1:14, it means that for every fourteen shares that a shareholder already has, they can buy one more share in the rights issue.

How to apply for Bharti Airtel Rights Issue?

Record Date: Tuesday, September 28, 2021, for the purpose of determining the shareholders who shall be eligible to receive the rights entitlement in the Issue.

Issue Opening Date: Tuesday, October 05, 2021

Issue Closing Date: Thursday, October 21, 2021

On the record date, the shareholders who hold the shares of Bharti Airtel ( at least 14 shares to get at least 1 share) will be eligible to apply for the rights issue from the issue opening date on October 05, 2021. To Thursday, October 21, 2021. The eligible shareholders can apply through the email received by the company to the registered e-mail address of the shareholders and make their first call payment.

How to pay for Bharti Airtel Rights Issue?

The terms of payment include 25% of the price to be paid at the time of application. The balance of 75% will be paid in two or more calls that will be decided by the board. The maximum timeframe for the payment is 36 months.

On Application – Rs. 133.75 (Face Value – Rs. 1.25 and Premium – Rs. 132.50).

Two more additional calls as may be decided by the Board / Committee of the Board from time to time – Rs. 401.25 (Face Value – Rs. 3.75 and Premium – Rs. 397.50)

FAQ

1. Date of allotment of Airtel Right Issue

Record Date: Tuesday, September 28, 2021, for the purpose of determining the shareholders who shall be eligible to receive the rights entitlement in the Issue.
Issue Opening Date: Tuesday, October 05, 2021
Issue Closing Date: Thursday, October 21, 2021
The allotment date is yet not informed mostly within 15 days of the first call payment

2. Which is the designated bank branch in Pune for Bharti Airtel right issue?

ISIN for Rights Entitlement: The International Securities Identification Number (ISIN) for the purpose of credit of dematerialized rights entitlement under Regulation 77 A of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended, read with applicable circulars, is INE397D20024.

3. Experts opinions on Bharti Airtel share rights issue

Analysts remained upbeat on Bharti Airtel Ltd. as they expect the carrier’s plan to raise funds through a rights issue to strengthen its balance sheet, creating headroom for 5G investments.

Motilal Oswal Maintain Buy rating with a target price of Rs 720


Citi Maintain Buy rating with a target price of Rs 760


Credit Suisse Maintains ‘outperform’ with a target price of Rs 775, implying an upside potential of 32.1% from Friday’s close.


Jefferies Reiterates ‘buy’ with a target price of Rs 685, implying an upside potential of 16.7% from Friday’s close.


UBS Rates ‘buy’ with a price target of Rs 655, implying an upside potential of 11.6% from Friday’s close.


CLSA Retains ‘buy’ with a price target of Rs 780, implying an upside potential of 32.91% from Friday’s close.
Edelweiss Maintains ‘buy’ with a target price of Rs 705, implying an upside potential of 20.1% from Friday’s close.

4. Is right issue of Bharti Airtel improves its financial performance?

however, if there is a belief that the funds being raised through the rights issue are for a positive intent and may help the company in the short or long run, the stock price, as well as the market capitalisation of the company, increases.

5. When will the application forms for rights issue of Bharti Airtel be issued?

Issue Opening Date: Tuesday, October 05, 2021
Issue Closing Date: Thursday, October 21, 2021

Within these dates, the shareholders will receive an e-mail from Bharti Airtel to pay for the First Call and apply for the Right issue

6. What will be impact of rights issue on Airtel share price?

Analysts remained upbeat on Bharti Airtel Ltd. as they expect the carrier’s plan to raise funds through a rights issue to strengthen its balance sheet, creating headroom for 5G investments.

however, if there is a belief that the funds being raised through the rights issue are for a positive intent and may help the company in the short or long run, the stock price, as well as the market capitalization of the company, increases.

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