BHARTI AIRTEL

Bharti Airtel Limited (Bharti Airtel) is an integrated telecommunication service providing

company. The company is principally engaged in the business of operating telecom services
in the Indian Subcontinent. Bharti Airtel telecommunication business is broadly categorized
into three service units namely, Mobile Services, Telemedia Services and Enterprise Services.
The Mobile Service unit provides mobile and fixed wireless services using global system
mobile (GSM) communication technology across major telecom circles in the country.

Financial year March 06 March 07 March 08 March 09 March 10

Debt-equity ratio 0.65 0.47 0.33 0.28 0.14

Long term debt-equity 0.61 0.43 0.30 0.26 0.12

ratio

Total debt 4796.29 5310.81 6570.34 7713.65 5038.92

Total equity 7345.56 11443.27 20241.49 27643.97 36737.18

*All figures in Rs. Crore

The following graphs indicate the general trend of debt-equity ratio and total debt and total
equity of Bharti Airtel.

Analysis of change in debt-equity ratio during March 2006-07

The debt equity ratio for Bharti Airtel has been constantly dropping every year. However, we
are analyzing the same for March 06-March 07 owing to a significant change from 0.65 to
0.47. Various changes that occurred during this period are:
 1) The Company allotted 165400 equity shares on exercise of stock options employees of
the company under the Company’s ESOP Scheme 2005.
2) The Company also allotted 1889453 equity shares upon conversion of Foreign Currency
Convertible Bonds (FCCBs) by their holders.
Due to these corporate actions, the issued, subscribed and paid-up equity share
capital increased from 1,893,879,304 (March 31, 2006) to 1,895,934,157 equity
shares as of March 31, 2007.
3) The company did not declare any dividend during this period.
4) Also, it reinvested its profits into the business.

The conversion of FCCBs to equity bonds resulted in reduction of secured loans:

March 06 March 07
Secured Loans 2839.90 245.27
*All figures are in Rs.Crores

However, unsecured loan for the company has increased by 3,107.68 cr.
March 07 March 06
Short Term Loans and Advances

From Banks 4,039,910 2,945,611

Other Loans and Advances

From Banks 41,748,524 13,978,961

From Others 4,655,143 2,404,629

50,443,577 19,329,201

Effects of converting FCCB into equity shares on stock prices

The decision to convert FCCBs into equity shares was take on 2 Aug 2006. Below we have
shown the trend in share prices from 1 Aug 2006 to 14 Aug 2006.

1 Aug 2 Aug 3 Aug 4 Aug 7 Aug 8 Aug 9 Aug 10 Aug 11 Aug 14 Aug

195.48 196.7 199.4 200.33 196.00 202.43 201.75 204.6 202.13 206.68
*All figures are in Rs.