There was a huge fall in the shares of telecom giant Bharti Airtel as soon as the market opened on Wednesday. While the stock was continuously making highs for the last several months, suddenly the news of a big block deal spoiled the mood of the investors, due to which the company’s shares fell by 2% today. This created a stir among the investors as to what is this decline pointing towards?
Airtel shares fell to Rs 2117.20 in the trading session of 26 November. This is a decline of about 2% compared to Tuesday’s closing of Rs 2161. The stock opened at Rs 2110 in the morning, but the news of the block deal increased the uneasiness further. Let us tell you that Airtel’s stock has gone up by about 15% in the last 6 months and has shown a strong rally of 35% in one year. Therefore such a sudden decline surprised investors.
Block deal worth Rs 7400 crore
According to CNBC-TV18 report, around 3.5 crore Airtel shares were transacted in the market on Wednesday. This is about 0.6% of the total stake of the company. It is estimated that this large-scale sale was worth Rs 7400 crore. According to reports, Indian Continental Investment (ICIL), which is part of the company’s promoter group, may be behind this block deal. However, neither the identity of the buyer nor the seller has been officially confirmed. Complete data of the block deal will be released by evening.
Second big deal in 3 weeks
The thing to note is that this is the second big block deal in Airtel in three weeks. Earlier this month, Singtel had raised $1 billion (about ₹10,800 crore) by selling 51 million shares. Continuous news of large scale stake selling by promoters is increasing uneasiness in the market.
Company’s results are strong, then why are investors worried?
- Airtel had given excellent results in the September quarter (Q2 FY25).
- Consolidated Net Profit: Rs 6791 crore (14.2% QoQ growth)
- Revenue: Rs 52,145 crore (5.4% QoQ growth)
- EBITDA: Rs 29,561 crore
- EBITDA Margin: 56.7%
Despite such strong fundamentals, the main reason for the fall in the stock is the continuous reduction in stake of big promoter groups, which investors are seeing as a negative sign in the short-term.
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