30 Nov 2012
Bharti Infratel IPO 2nd Biggest In India
Bhart Infratel IPO to raise Rs 4000-4,500 crore with a a price band of Rs 210-Rs 240
The offering of 188.9 million shares or 10 per cent of Bharti Infratel (BIL) is by the biggest IPO in the country after the $ 3.5 billion Coal India IPO in 2010. The BIL issue includes a fresh issue of 146.2 million shares while four existing shareholders including Compassvale Investments Pte Ltd. (an indirect wholly owned subsidiary of Temasek Holdings Private Limited), GS Strategic Investments Limited, Anandale Limited and Nomura Asia Investment (IB) Pte Ltd. are selling 42.7 million shares.
Bharti Infratel has 34,220 towers (as of end September 2012) and has a 42 per cent stake in Indus Towers 110,561 towers. The consolidated Bharti Infratel has 80,656 towers across the country. The Bharti Airtel shareholding in BIL will reduce from the current 86.09 to 79.8 per cent post the IPO. During 2011-’12, Bharti Infratel recorded revenues of Rs 9,597 crore with net profits of Rs 750.7 crore.
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Bank of America Merrill Lynch, JP Morgan, Standard Chartered, Deutsche Bank, HSBC, UBS, as well as India's Kotak Mahindra and Enam are advising Bharti Infratel on the IPO.
The tower business has seen no IPO happen till now. In recent times there has been only one big tower deal—GTL acquired the 17,500 towers of Aircel for Rs 8,026 crore in 2010. That works out to valuing an individual tower at around Rs 4.5 lakh. Since then valuations of tower companies have fallen as new operators slowed down roll-out post the cancellation of licences.
As a telecom industry official says: “When a large operator like Bharti Infratel looks to go public, it brings in a huge degree of confidence in the market.” That however remains to be seen.