Mumbai: Bharti Infratel will buy back 47 million shares for Rs 425 each in a deal valued at Rs 2,000 crore, in a bid to return surplus funds back to shareholders, a regulatory filing by the company said on Tuesday.
“Further to our information dated June 11, 2016, where the company has informed that the shareholders of the company have approved the proposal to buy back fully paid-up equity shares of the company from existing shareholders on a proportionate basis through tender offer process,” the statement filed with the BSE said.
After the regulatory filing, the company's shares were trading at Rs 382 per share, up 0.90% at the BSE at 2.46 p.m. The offer price represents a 11.25% premium over the prevailing price.
According to the company, its aggregate paid-up equity capital and free reserves as on March 31, 2016 was Rs 10,348 crore. Since the norms don't allow the buyback amount to exceed 25% of this threshold, the maximum amount permissible is Rs 2,587 crore.
Against that, size has been kept at Rs 1,999,99,99,775 excluding the transaction costs like brokerage, applicable taxes such as securities transaction tax, service tax, stamp duty, which is within the maximum amount as aforesaid, the company said.
This represents 19.3% of the company's total paid-up equity capital and free reserves.
"The buy back is being proposed by the company to return surplus fund to shareholders, which are over and above its ordinary capital requirements and in excess of any current investment plans, in an expedient, efficient and cost effective manner," the company said.
Bharti Infratel is the independent telecom infrastructure company of Bharti.
In India, it has over 35,000 towers across 18 states and 11 Telecom circles. Bharti Infratel also has a 42% stake in Indus Towers which was created as a joint venture between Bharti Infratel, Vodafone and Aditya Birla Telecom.