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Date, price set for Bharti tower IPO

Mumbai, Nov. 30: The Sunil Mittal-owned Bharti group is floating an IPO again — its first in more than a decade.

On Friday, Bharti Infratel Ltd, the telecom tower unit of Bharti Airtel, announced a price band of Rs 210-240 per share. The issue opens for subscription on December 11.

At the upper end of the price band, the company will raise about Rs 4,533.60 crore. If the book-built price settles at the lower end, it will be able to mobilise around Rs 3,967 crore.

Bharti Infratel will offer a discount of Rs 10 per share to retail investors.

The IPO comes at a time the market has started to rally, buoyed by expectations of a strong push for the next round of economic reforms.

Market circles believe the offering will evoke a good response because it comes from the Bharti group and is attractively priced.

Experts say the valuation is at a discount to global peers. The shares are being sold at a forward EV/EBITDA (enterprise value to earnings before interest, tax, depreciation and amortisation — a well-known valuation multiple) of over 9 times compared to over 17 times in the case of global giants such as American Towers. A low ratio indicates that a firm might be undervalued.

The issue comprises a fresh issue of 146,234,112 equity shares by the company and an offer for sale of 42,665,888 shares by certain shareholders. These include units of Temasek Holdings, Goldman Sachs and Nomura Holdings.

Not more than 50 per cent of the issue will be available for allocation to qualified institutional buyers (QIBs) and not less than 15 per cent and 35 per cent of the issue will be available non-institutional bidders and retail individuals, respectively.

The offer will close for subscription on December 14.

It was in 2002 that Sunil Mittal came out with an IPO of Bharti Televentures (now Bharti Airtel). For the domestic investors, the issue is the biggest after the state-run Coal India raised Rs 15,475 crore in October 2010.

Bharti Infratel chairman Rakesh Bharti Mittal said India was one of the few countries where the telecom tower business had flourished as telecom companies had not been setting up their infrastructure. Instead, they have been relying on the infrastructure provided by entities such as Bharti Infratel.

 
 
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