NSDL increases Airtel's foreign ownership limits to 100%; stock up 12% | Economic Times

Shares of telecom operator Bharti Airtel rallied as much as 12% to Rs 484 on Wednesday after National Securities Depository (NSDL) increased its foreign ownership limits (FOL) to 100% from 49%. With the increase in FOL limits, Bharti’s weight in MSCI India index is likely to double from the current 1.92%.The current Foreign Inclusion Factor (FIF) is 0.23 which will increase to 0.43 now. Assuming that the MSCI benchmarked index makes around $35 billion, it would imply buying of 64.9 million shares worth over Rs 3,000 crore, said analysts.MSCI in August has reduced Bharti Airtel weight from 3.68% to 1.92% citing no clarity on the effective date of change in its foreign investment limit, a move which has led to massive sell-off in Bharti shares. As per analysts estimates, foreign investors have cut exposure to the stock by nearly Rs 3,800 crore in September.Shares of Bharti fell almost 24% from a high of Rs 550 to Rs 419 within a month of MSCI announcement in August.“As per National Securities Depository (NSDL), the FOL applicable to Bharti Airtel is 49% under the automatic route. Considering the current FOL of 49% , the foreign room, reflecting all foreign shareholdings, falls in the range of 7.5% to 15%. Hence, Bharti Airtel’s weight will be reduced from 3.68% to 1.92% in MSCI India Index”, MSCI said in a note in August.MSCI said it is aware of the government approval to increase the FOL of Bharti Airtel to 100% announced at the beginning of 2020. However, MSCI is not aware of any public information on the potential effective date of this change, it stated.Bharti Airtel on Tuesday said its consolidated net loss for the quarter ended September narrowed to Rs 763 crore, from Rs 23,405 crore a year ago. The telecom major’s revenue from operations rose 22 per cent to Rs 25,785 crore from 21,131 crore a year ago. The better revenue growth was driven by higher tariffs and a rise in data usage from a coronavirus-fuelled shift to remote working.