SingTel Bharti Airtel stake sale: Singapore Telecommunications (SingTel) announced on Thursday that it has divested a 0.8 per cent stake in India's Bharti Airtel for S$950 million (approximately $711 million) to investment firm GQG Partners, as reported by news agency Reuters.

This transaction is the latest move by Southeast Asia's largest telecommunications operator to optimise its capital allocation strategy, bringing the total proceeds from such divestments to S$8 billion since its strategic reset in 2021.

SingTel, through its subsidiary Pastel, offloaded 49 million shares, equivalent to 0.8 per cent of Bharti Airtel's outstanding shares. This divestment effectively reduces SingTel's stake in the Indian telecom operator by 0.8 percentage points, according to a statement released by the company.

Following the completion of the transaction, SingTel's effective stake in Bharti Airtel will stand at 29 per cent, with an estimated value of around S$33 billion.

The telecommunications giant has been gradually selling its holdings in Bharti Airtel, including a direct sale of a 3.3 per cent stake for S$2.54 billion in 2022.

SingTel's Finance Chief, Arthur Lang, expressed confidence in the company's capital management strategy, stating, "The Group is now in an even stronger position to execute our disciplined capital approach of balancing investing for greater growth and delivering strong, sustainable returns for our shareholders."

The company anticipates recording a gain of approximately S$700 million from this stake sale, although specific details regarding the difference in the divestment price were not provided.

SingTel has been focused on enhancing shareholder returns, having raised its dividend policy to between 70 per cent and 90 per cent of underlying net profit in November last year. The company expects to pay dividends at the upper end of this range in fiscal 2024.

Lang further remarked that the current share price of SingTel may not fully reflect the intrinsic value or growth potential of the company.

As of the latest trading session, SingTel shares were up by 0.4 per cent at S$2.35 each, while Airtel shares saw a 0.7 per cent increase, trading at Rs 1,201.95 per share.

(With Reuters inputs.)