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When Sunil Bharti Mittal was 18, he borrowed money from his father to start his first business manufacturing crankshafts for local bicycle manufacturers.
The young entrepreneur set up an import business with his brothers in Punjab, bought the Suzuki Motors dealership to import Japanese electric generators, and in the 1980s began manufacturing India’s first push-button telephones.
Today, the Indian tycoon controls Bharti Enterprises, which in turn owns Bharti Airtel, India’s largest telecoms operator and Africa’s second-largest mobile network, as well as a collection of trophy hotels including The Hoxton and Gleneagles.
Mittal is said to be worth around £18 billion, making him the tenth richest man in India.
His father obviously had a good eye for investments, and perhaps foresight too, as he named his son Bharti after Bharat, the Hindi name for India, to reflect his patriotism.
Investment: Indian tycoon Sunil Bharti Mittal to spend around £3.2bn to become biggest investor in BT
Now Bharti Global, the group’s international investment arm, is shelling out more than £3bn to become the biggest investor in BT.
It is buying the 24.5 percent stake in troubled French telecoms operator Altice, owned by Patrick Drahi, whose empire is struggling under a mountain of debt.
Mittal is clearly very smart and thinking long-term. He has ruled out making a bid for BT (to ensure the stock does not become too frothy) and has voluntarily applied for clearance under the UK’s National Security and Investment Act, which shows good manners.
He knows how to win the trust of governments (he has close relations with Indian Prime Minister Narendra Modi), and describes his involvement as “a vote of confidence in the UK as an attractive global destination for investment, with a stable business and political environment attractive to long-term investors.”
Very well. Rachel Reeves will invite you to tea shortly.
The question for BT investors is whether Mittal will be able to work his magic on the telecoms group as he did with Bharti. Some believe he will.
The shares rose 8.4 per cent yesterday. They are already up 26 per cent since Allison Kirkby took over as director in February, but they still have a long way to go to reach the 200p price of five years ago.
The verdict so far is that Kirkby is doing a great job in a difficult role, driving hard at the rollout of the 5G network.
Mittal is not the only one who is impressed. Mexican billionaire Carlos Slim recently bought a 3.2 percent stake.
If Mittal doesn’t want to bid, what does he want from BT? Should investors come on board?
There are some clues. The two companies know each other well. BT once owned a stake and sat on the board of Bharti Airtel. Mittal wants BT to be much bolder.
He also said the deal was a “significant milestone” for Bharti’s global network, which operates across 17 countries in Asia and Africa.
What could he have in mind? A merger, perhaps? We’ll see, but a board seat would be a good start. So yes, the stock looks cheap.
Hawkman
The most aggressive of the Bank of England’s hawks, Catherine Mann, is flapping her wings again.
The Monetary Policy Committee member, who has consistently voted against rate cuts, warns that we should not be lulled into thinking that the UK’s battle to control inflation is over.
Even though price increases are easing, he says underlying price pressures in the economy mean the Bank should not ease interest rates.
In many ways, Mann is right. Wage pressures remain high, while other factors, such as international shipping costs, have risen again due to the Red Sea conflict.
Fortunately, these costs are declining. Most wage claims are stabilizing at 3 percent, while container costs are stabilizing.
True, July inflation figures, due tomorrow, will likely show inflation rising back to 2.3 percent, but Thursday’s GDP figures will show much stronger growth.
In short, Mann is being too cautious. Rates should continue to fall if we do not want to destroy confidence.
AZ on steroids
In May, AstraZeneca published such an optimistic report (20 new drugs in development, many of them life-saving antibody-drug conjugates) that I predicted the stock would continue to rise.
Now brokers TD Cowen are catching up and AZ looks set to become the UK’s first £200bn company. You read it here first.
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