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Bharti Airtel surges then pares gains as Google to buy $700 million stake

January 28, 2022 11:51 AM

Bharti Airtel surges then pares gains as Google to buy $700 million stake
Bharti Airtel will issue 71.2 million shares of the company to Google on a preferential basis at Rs. 734 apiece, which is a premium of 4 percent to the closing price on January 27

Shares of Bharti Airtel jumped as much as 6 percent in trade on January 28 after the company announced a strategic partnership with US technology giant Google. However, they pared most of the gains to trade 0.7 percent higher at Rs. 711.8 on the National Stock Exchange at 09:34 AM.

Bharti Airtel will issue 71.2 million shares of the company to Google on a preferential basis at Rs. 734 apiece, which is a premium of 4 percent to the closing price on January 27. The preferential allotment of equity shares will see Google own a 1.28 percent stake in the country’s second-largest telecom operator, the company said in an exchange filing.

Besides the near $700-million stake purchase, Google will also invest up to $300 million towards implementing various commercial agreements which will include investments in scaling Airtel’s offerings.

“As a part of its first commercial agreement, Airtel and Google will work together to build on Airtel’s extensive offerings that covers a range of Android-enabled devices to consumers via innovative affordability programs,” Bharti Airtel said in a statement.

Also Read : Bharti Airtel stock gains on signing pact with Hughes for satellite broadband services

The telecom operator also hinted at a possible collaboration on affordable smartphone on the lines of rival Reliance Jio Infocomm’s JioPhone Next. “The companies will continue to explore further opportunities to bring down the barriers of owning a smartphone across a range of price points, in partnership with various device manufacturers,” Bharti Airtel said.

Bharti Airtel said that it will also be scaling up the deployment of Google’s network virtualization solutions and potentially co-create India-specific network domain use-cases for 5G network.

“Our commercial and equity investment in Airtel is a continuation of our Google for India Digitization Fund’s efforts to increase access to smartphones, enhance connectivity to support new business models, and help companies on their digital transformation journey,” said Sundar Pichai, chief executive officer at Google and Alphabet.

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