Mumbai, Aug. 13: Private equity fund Warburg Pincus has reduced its holding in Bharti Tele-Ventures by 3.35 per cent to 15.17 per cent.
Brentwood, an affiliate of Warburg Pincus, sold 6.2 crore Bharti shares at Rs 155 apiece. The Rs 960-crore-deal accounted for almost 3.3 per cent of Bharti, most of which has been sold to about five to six foreign institutional investors, brokers said.
Bharti’s shares fell as the block deal confounded investors. The share touched an intra-day high of Rs 156.90 before it traipsed the bottom at Rs 146.50. The scrip recovered part of the losses when it closed at Rs 150.60, surrendering Rs 7.80 from Thursday’s close of Rs 158.50.
Sunil Mittal, chairman and group managing director of Bharti Tele-Ventures, said: “Warburg Pincus was not supposed to hold on to the shares for life. The company was expected to sell; what it has sold today is very less, it could have been more. The reactions in the market are more due to the media reports on foreign direct investment rather than sale of shares.”
“These type of deals keep happening,” an FII analyst said. As an investment bank and a venture capital firm, Warburg would be looking at an exit opportunity at the right price, he added.
The Bharti block deal led to a quantum jump in traded volume on the Bombay Stock Exchange; some 6.87 crore shares were traded for a record sum of Rs 1,062.93 crore. As a result, the total turnover of the exchange jumped to Rs 2,769.69 crore from Thursday’s average of Rs 1,700 crore.
For Brentwood, one of the early birds to spot the mobile telephony firm, the pickings are rich as they bought into the company at low rates averaging Rs 52, the analyst said.
Promoters will continue to hold over 46 per cent in the company. Singtel is the other major shareholder. Reports suggest that Temasek, a Singapore based investment bank, is one of the buyers.
Sources say there was a clutch of six different investors from the financial capitals of Europe, the US and Asia latched on to the Brentwood-owned shares. Citigroup is believed to be the adviser for the block deal.
A report in a leading financial daily also caused some discomfort to Bharti. It said the government may insist on certain tough conditions before raising the foreign investment limit to 74 per cent. Bharti will be a major beneficiary if the ceiling is revised.
Bharti will seek shareholders' approval for selling 200 million shares in a sponsored American depository receipt secondary issue, a move which will enable the company to get listed on US bourses.
“We have our annual general meeting on August 20. All the existing shareholders will get a chance to convert their holdings into ADRs and sell them,” joint managing director Akhil Gupta said.