Google to invest in Bharti Airtel; stock jumps 6% before erasing gain

Shares of Bharti Airtel rallied 6 per cent to Rs 752.80 on the BSE in Friday’s intra-day trade, after the company said its board has approved raising funds to the tune of Rs 5,224 crore by issuing shares to Google on preferential issue basis. The telecom services provider will issue 71.18 million equity shares at price of Rs 734 per share.

Profit booking at higher levels saw the counter erase these gains. At 09:26 am, Bharti Airtel's stock traded flat at Rs 707.05, as compared to 0.81 per cent rise in the S&P BSE Sensex.

According to a release, Google will invest up to $1 billion in a partnership with Airtel as part of its 'Google for India Digitization Fund'. The deal includes investment of $700 million to acquire 1.28 per cent (shareholding including partly paid shares) ownership in Airtel and up to $300 million toward potential multi-year commercial agreements.

“The board of directors of the Company, at its meeting held today i.e. January 28, 2022, approved the issuance of upto 71,176,839 equity shares of face value of Rs 5 each of the Company to Google International LLC on a preferential basis, at a price of Rs 734 per equity share aggregating to Rs 5,224.38 crore,” Bharti Airtel said in exchange filing. The preferential issue subject to the approval of regulatory/ statutory authorities and the shareholders of the Company at the Extraordinary General Meeting, the company said.

Bharti Airtel and Google announced that they will partner on a long-term, multi-year agreement to accelerate the growth of India’s digital ecosystem. Together, they will work to bring best-in-class end-to-end products to serve customer needs, provide quality customer experience, and bring their expertise to solve problems of affordability, access, and digital inclusion.

As part of this partnership, Google intends to invest up to $1 billion, as part of its Google for India Digitization Fund, which includes equity investment as well as a corpus for potential commercial agreements, to be identified and agreed on mutually agreeable terms over the course of the next five years.

Meanwhile, Bharti Airtel has outperformed the market recently at the bourses, gaining 4 per cent in the last one month as compared to a marginal 0.37 per cent fall on the S&P BSE Sensex. In the last three months, the stock has gained 3 per cent as against a 4 per cent decline recorded by the benchmark index. On a six-month time basis, the stock has rallied 27 per cent, as against a 10 per cent gain on the Sensex. The stock price of Bharti Airtel had hit a record high of Rs 782 on November 24, 2021.