Bharti Airtel Limited shares plunged 3.31% to an intraday low of Rs 736.1 following a massive block deal of a 1.09% stake, according to Bloomberg.

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Three transactions totalling around 104 million shares at a price of Rs 750 each happened, according to CNBC TV18. Airtel was trading at Rs 747.05 on the BSE at 11.30 a.m., down 1.87% from its previous close. The names of the purchasers and sellers remain unknown.

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Singapore Telecommunications, or Singtel, said in August that it will sell a 3.3% stake in Airtel to Bharti Telecom Limited (BTL) for $1.61 billion over the next three months, according to Reuters. 

Singtel, Southeast Asia’s largest telecom company, said that its subsidiaries Pastel and Viridian would sell 198 million stakes in India’s second-largest mobile provider.

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Following the transaction, Singtel/Mittal family will own 29.7%/25.6% of Airtel, with both groups working to equalise their holdings over time.

“With Singtel’s selling entities domiciled in Mauritius, there are no capital gains tax implications and hence we expect the transaction to happen off-market,” said IIFL Securities in a note to investors.

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“BTL thus has to raise debt to fund this $1.6 billion transaction but we believe that rising dividend payouts from Airtel should keep BTL’s debt in check. Airtel remains our top pick as it is well placed to benefit from continued RMS gains and tariff hikes,” IIFL Securities added.

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“Singtel would use the deal proceeds to fuel its 5G CAPEX and future growth initiatives. Its net debt to core profit should fall to 2.1x from 2.7x as of end-FY22 after this deal. Moreover, with Singtel’s one-year forward enterprise value/core profit of 12.5x versus Airtel’s 8.7x, we do not see it selling further stake beyond the targeted equalisation of stakes between Singtel and Mittals,” IIFL Securities said.

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Bharti Airtel posted a 465.81% increase in its consolidated net profit for the quarter ended June 30, 2022, to Rs 1,606.9 crore. Its consolidated profits before interest, taxes, depreciation, and amortisation, or EBITDA, surged by 25.9% to Rs 16,604 crore, while its EBITDA margin increased by 150 basis points year on year to 50.6%.