Adds CFO comment in paragraph 6, analyst comment in paragraphs 10, 11, and background

May 16 (Reuters) - Singapore Telecommunications STEL.SI said on Friday it had sold around 1.2% of its stake in India's Bharti Airtel BRTI.NS for S$2 billion ($1.54 billion), netting an estimated gain of S$1.4 billion.

Pastel, a unit of Singtel, sold 71 million shares in Airtel at 1,814 rupees apiece, reflecting a 2.85% discount to the closing price of Airtel's stock on Thursday.

Singtel, which has been an investor in Airtel for over 20 years, said its stake would drop to 28.3%, valued at around S$48 billion, from 29.5% previously.

Singtel has been selling shares in Airtel -- a 3.3% stake to Bharti Telecom in 2022 and 0.8% to GQG Partners GQPIL.PK in March 2024. However, after the sale to GQG, the last one it reported, Singtel had said it had a 29% stake in Airtel.

Since a "strategic reset" in 2021, the Singapore-based firm has sought to effectively use its capital and also improve shareholder returns.

"This transaction allows us to crystalise value at an attractive valuation ... and underscores Singtel's commitment to disciplined capital allocation and sustained value realisation for shareholders," CFO Arthur Lang said in a statement.

Singtel also said it has been working with Bharti Enterprises -- an Indian conglomerate run by Sunil Bharti Mittal and whose telecom arm is Airtel -- "to equalise its effective stake in Airtel in the medium term".

While Singtel did not specify that it was looking to match Mittal's stake in Airtel, Lang had, in 2023, said this was the target.

Singtel and Airtel did not respond to a Reuters email seeking comment.

CLSA analyst Daxin Lin estimates Mittal's stake in Airtel to be about 23%.

The sale was in line with Singtel's capital recycling plan and should not come as a surprise, given the aim to match Mittal's stake, Lin said in a note after media reports broke the news of the sale on Thursday.

Singtel's shares were up 1.1% at S$3.79 in Singapore, while Airtel's shares were down 2.8% at 1816.3 rupees in Mumbai. ($1 = 1.2950 Singapore dollars)

(Reporting by Rishav Chatterjee in Bengaluru; Editing by Savio D'Souza)

((Rishav.Chatterjee@thomsonreuters.com;))