Airtel waives off right of first refusal to acquire TCIL’s stake in Bharti Hexacom

Bharti Airtel has waived off its right of first refusal to acquire Telecommunications Consultants India Limited’s (TCIL) 30 per cent stake in Bharti Hexacom as it sees no immediate value in such a move.

Last month, Airtel’s subsidiary Bharti Hexacom filed a draft offer document with the Securities and Exchange Board of India (SEBI) to sell 20 per cent stake of TCIL which will provide the government with a partial exit. TCIL’s holding will drop to 10 per cent after Bharti Hexacom’s initial public offer (IPO), while Airtel will retain its 70 per cent stake in the unit.

According to Bank of America (BofA) Securities, Airtel’s management believes that a potential Bharti Hexacom IPO, over any other method, would provide transparency in pricing, which is a key requisite of the government when it requires to fully sell its stake in Airtel’s subsidiary. BofA does not see any impact on Airtel from any potential listing of Bharti Hexacom as the telco is not reducing its stake in the unit or raising money.