Indian tycoon’s BT stake is a vote of confidence in UK: MAGGIE PAGANO

When Sunil Bharti Mittal was 18, he borrowed money from his father to start his first business making crankshafts for local bicycle manufacturers.

The young entrepreneur went on to set up an import business with his brothers in the Punjab, snapped up the Suzuki Motors dealership to import Japanese electric generators and in the 1980s started making India’s first push-button phones.

Today, the Indian tycoon controls Bharti Enterprises, which in turn owns Bharti Airtel, India’s biggest telecom operator and Africa’s second biggest mobile network as well as a collection of trophy hotels such as The Hoxton and Gleneagles.

Mittal is said to be worth around £18billion, making him India’s tenth richest man. 

His father obviously had an eye for an investment – and maybe foresight too, as he named his son Bharti after Bharat, the Hindi name for India, to reflect his patriotism.

Now Bharti Global, the group’s international investment arm, is shelling out more than £3billion to become the biggest investor in BT. 

It is buying the 24.5 per cent stake from France’s troubled telecoms operator Altice, owned by Patrick Drahi, whose empire is struggling under a mountain of debt.

Mittal is clearly super smart – and playing a long game. He’s ruled out bidding for BT – thus ensuring the shares don’t get too frothy – and has applied voluntarily for clearance under the UK’s National Security and Investment Act, showing good manners.

He knows how to cosy up to governments (he has close relations with Indian Prime Minister Narendra Modi), describing his stake-building as ‘a vote of confidence in the UK as an attractive global destination for investment, with a stable business and policy environment attractive for long-term investors’.

Nice one. Rachel Reeves will have him in for tea before long.

The question for BT’s investors is whether Mittal can work his magic at the telecoms group as he has done with Bharti. Some think so. 

The shares rose 8.4 per cent yesterday. They are already up 26 per cent since Allison Kirkby became boss in February, but still have far to go to catch up with the 200p price of five years ago.

The verdict so far is that Kirkby is doing a great job in a difficult role, pushing hard on rolling out the 5G network. 

Mittal is not the only one to be impressed. Mexican billionaire Carlos Slim recently bought a 3.2 per cent stake.

If Mittal doesn’t want to bid, then what does he want from BT? And should investors join the ride?

There are some clues. The two companies know each other well. BT once owned a stake and had board seats at Bharti Airtel. Mittal wants BT to be much bolder.

He also says the deal is a ‘significant milestone’ for Bharti’s international network. It operates across 17 countries in Asia and Africa. 

What can he have in mind? A merger maybe? We shall see but a seat on the board would be a good start. So yes, the shares look cheap.

Hawkish Mann

The most hawkish of the Bank of England’s hawks, Catherine Mann, is fluttering her wings again. 

The Monetary Policy Committee member, who has voted consistently against rate cuts, warns we shouldn’t be seduced into thinking the UK’s battle to control inflation is over.

Despite price rises easing, she says that underlying price pressures in the economy mean the Bank should not go soft on interest rates.

In many ways Mann is correct. Wage pressures are still high while other factors such as global shipping costs have been rising again because of the Red Sea conflict.

Luckily, these costs are easing up. Most pay claims are settling down at 3 per cent while container costs are steadying. 

It is true that July’s inflation figures – due tomorrow – are likely to show inflation creeping up again to 2.3 per cent. But GDP figures on Thursday will show much stronger growth.

On balance, then, Mann is being over cautious. Rates should continue to come down if we don’t want to kill off confidence.

AZ on steroids

Back in May, AstraZeneca came out with such a bullish report – 20 new medicines in the pipeline, many of them revolutionary life-saving antibody drug conjugates – that I tipped the shares to go still further. 

Now brokers TD Cowen are catching up, and AZ looks set to become the UK’s first £200 billion company. You read it here first.

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