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Informist, Tuesday, Mar. 10, 2026

 

NEW DELHI – The Supreme Court Tuesday upheld Bharti Telecom Ltd.'s cancellation of 28.46 million shares held by minority shareholders of the company. The top court rejected the minority shareholders' plea that they were arbitrarily disgorged of their shareholdings and eased out of Bharti Telecom, the holding company of telecommunications major Bharti Airtel Ltd., in a grossly unfair manner, making a sham of an evaluation fixing the share price at an unreasonably low value.  

 

"Far from the bullish and bearish trends that regulate the flexible share value of listed companies in a volatile market, the appellants held on to the shares of BTL (Bharti Telecom); with zero listing, zero marketability, zero dividend payment, zero exit options also declining purchase offers, with the stoic resolve of a feline waiting patiently for its prey," said a bench of Justice Sanjay Kumar and Justice K. Vinod Chandran. A fair and reasonable value was offered to the minority shareholders and majority of the identified shareholders present and voting, voted in favour of the resolution for reduction of share capital through cancellation of shares, said the court.

 

Even on a microscopic scrutiny, the valuation of shares of the company couldn't be found to be "egregiously wrong", especially looking at the previous offers and also the rights issue offered at par, prior to the reduction of share capital, exponentially increasing the take-aways of the individual shareholders, the court said.  "...valuation is an exercise which is best left to the experts..." it said. 

 

The case has its genesis in Bharti Telecom's board of directors resolving in 2018 to pursue the reduction of share capital of the company. The scheme involved cancelling and extinguishing 28.46 million shares held by minority shareholders for a price of INR 163.25 per equity share. 

 

The petitioners argued that there was unfairness in the fixation of share value, which edged out individual investors with a raw deal for the shares held for long. "The directors and the majority have a fiduciary relationship with not only the company but also with the minority, negated totally in fixing the share prices," said the petitioners. They argued that Bharti Telecom had obtained a valuation report from J.C. Bhalla & Co, which estimated that the fair value per equity share of Bharti Telecom was INR 310 per share in January 2018.

 

On Tuesday, shares of Bharti Airtel Ltd. ended 0.9% lower at INR 1,850.40 on the National Stock Exchange.  End

 

Reported by Surya Tripathi

Edited by Avishek Dutta

 

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