The Bharti Airtel’s new FII investment has hit a roadblock. The foreign institutional investors (FIIs) cannot increase their shareholdings & exposures in the countries largest telecom company, Bharti Airtel until the government allows the company to hike its foreign investment ceiling from 49% to 74%.

Currently, FII investment is close to hitting the threshold limit beyond which no new foreign fund will be allowed to make an entry into Bharti unless it buys from an FII that already has a holding in the company.

The combined foreign investment in Bharti Airtel Ltd is about 48% at present as compared to the maximum foreign investment of 49% that is allowed to the company of the 48%, 21.6% is held by long-term strategic foreign investors such as Vodafone & Singtel, 0.82% by NRIs & OCBs & 25.62% by FIIs.

The strategic investors & NRIs/OCBs are unlikely to exit the company. Hence, the FIIs can expedite their total shareholding in the company by a maximum of one percentage point under the current foreign investment ceiling.

Once the shares of the Bharti Stock are sold & bought among foreign funds, significant FII trading can be expected.

Many companies such as Infosys, HDFC, ICICI Bank, Mahindra & Mahindra, Mphasis & Dr. Reddy’s FII holdings are comparatively greater than Bharti. Foreign investment in Bharti is expected to exceed 49%.

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