Airtel, the Indian telecom giant is getting a fresh financial boost from American search giant – Google. The latter has announced plans for inducing upto $1 billion in Airtel soon.
This is according to the previous plans of India Digitization Fund, where $700 million of that proposed fund will be for acquiring a 1.28% stake, and the rest for expanding Airtel’s digital offerings in India. The deal is subject to regulator’s approval.
Fresh Foreign Investment For Airtel
After acquiring a board set by investing $4.5 billion in Jio last year, Google is now eyeing Airtel, the second-largest telecom company in India. As per reports, Google is investing nearly $1 billion in Airtel, where $700 million of that goes for acquiring a 1.28% stake (@734 a share), and the rest $300 million is for Airtel to expand its digital offerings in India.
This comes after Airtel raised 210 billion INR last year, from the sale of shares to existing shareholders. Google’s fresh investment will now help Airtel to venture deep into cloud services for enterprises and even the production of affordable smartphones too.
While the above deal is yet to be approved by the Indian regulators, it’s most likely to be accepted. Google’s funding Airtel is under the pre-planned scheme of India Digitization Fund, which Google announced a couple of years ago to induce nearly $10 billion over a course of 5-7 years for development.
Foreign companies picking up stakes in potential Indian companies isn’t new. We saw Amazon and Walmart battling for Flipkart earlier, and even Facebook investing $5.7 billion in Jio for nearly 10%. Beating the market metrics, Jio has grown to be the No.1 telecom in India in just a span of 5 years! This pushed Airtel to the No.2 spot, and Vodafone and Idea struggled and later merge to survive.
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