Sunil Bharti Mittal, founder of Bharti Airtel, aims to boost the promoter firm Bharti Telecom's stake in the telecom giant above 50% within the next decade, aligning with his plan to pass leadership to his children. He outlined this vision during the company's Q4 earnings call, stressing the need for substantial cash reserves-around ₹1 lakh crore at current valuations-to acquire the additional 10% stake. This move underscores a push for consolidated promoter control in India's competitive telecom sector.
Restoring Historical Promoter Dominance
Bharti Telecom, owned by the Mittal family and Singtel, currently holds 40.47% of Airtel, with promoter entities collectively at 48.87%. Mittal emphasized returning to the 51% controlling stake Bharti Telecom historically maintained as the founding promoter. Bharti Enterprises holds 50.56% in Bharti Telecom, while Singtel owns 49.44%, and Singtel also retains a 7% direct stake in Airtel.
Mittal's reappointment as chairman until September 30, 2031, provides a stable timeline for this strategy. He projects raising the stake in 3-4 years, contingent on Airtel's operational performance under its executive team. Strong cash flows from share buybacks and dividends would fund the purchases, reducing the gap with Singtel's holdings from 6% to 3.6% post-transaction.
Cash Generation and Strategic Priorities
To secure the extra stake, Airtel must prioritize financial discipline without depleting its growth potential. Mittal contrasted this with IT firms that exhausted value through excessive dividends and buybacks, leaving them weakened. He urged investors to support acquisitions of undervalued telecom assets globally once stability is achieved.
Airtel reported a 33.5% drop in Q4 net profit to ₹7,325 crore due to one-time provisions, yet annual revenue surpassed ₹2 lakh crore for the first time, fueled by 3.2% customer growth to 66.5 crore and rising ARPU in India. These metrics position the company to generate the needed liquidity.
Expanding Influence in Airtel Africa
Mittal also targets increasing Airtel's ownership in Airtel Africa to 90%, the UK regulatory limit. The board recently approved a 16.31% hike to about 79% via a ₹28,220 crore share swap, up from 62.73%. Buybacks and potential block deals could close the remaining gap in 7 years, channeling more income back to the parent and enhancing shareholder returns.
This dual focus on domestic control and African expansion reflects Bharti Group's evolution since 1976 into telecom, space communications, digital infrastructure, and financial services. Mittal's succession plan ensures family stewardship amid India's telecom consolidation and 5G rollout pressures.
