M&A time on Dalal Street: Bharti Airtel acquires Telenor India, stock soar 11%

India's largest telecom operators, both in terms of subscriber base and market revenue share, informed the Exchanges in a filing that it has entered into a definitive agreement to acquire telecom operations-Telenor India.

The move from the country’s largest telecom operator comes close on the heels of Vodafone-Idea planned merger and Reliance Jio announcing tariff plans for its 100 million plus customers from April. Post the acquisition, Bharti Airtel’s subscriber base will swell to 32.19 crore from the current 26.94 crore.

The acquisition is purely a Jio effect, which is making the incumbents nervous. All the players are looking at wide scale consolidation in the sector, given the deep pockets of India’s most profitable company in the Reliance Industries, which has already pumped in a mammoth USD 20 billion dollar in its telecom venture Jio.

As part of the agreement between Bharti and Telenor India, Airtel will acquire Telenor’s running operations in seven running circles comprising some of the most populous states in the country like UP, Maharashtra and Bihar. The proposed acquisition will not only help Bharti Airtel bolster its customer base and network but at the same time, provide the much-needed ammunition to fight competition by way of additional spectrum in the 1,800 MHz.

Bharti Airtel is believed to derive significant synergies from the acquisition, given the spectrum bandwidth it will get post the operations. The telecom sector has been the hotbed of activity, ever since the arrival of oil & gas behemoth Reliance Industries entered the telecom fray, with the launch of Jio. Consolidation of telecom operations into 3-4 big players augurs well for the companies and also, for a large market like India.

Reacting to the news, development Bharti Airtel stock spiked more than 11 per cent in intraday trade to hit a 52-week high of Rs 401, before cooling up to trade with gains of over 5 per cent at Rs 380.20 on NSE.