The Telegraph
Saturday , December 29 , 2012
Since 1st March, 1999
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Bharti Infratel slips on debut

Mumbai, Dec. 28: Bharti Infratel today disappointed the Street by plunging 13 per cent on its debut on the bourses.

The telecom tower company had raised over Rs 4,118 crore in the biggest initial public offering in two years. Analysts blamed the poor close on the high issue price.

The IPO, which was open from December 11-14, came in the price band of Rs 210-240 per share. The issue price was fixed at Rs 220 apiece for institutional investors, while retail investors were given a discount of Rs 10 per share.

Shares of the Sunil Mittal group firm opened at Rs 200 on the National Stock Exchange and fell 14.25 per cent to a low of Rs 188.65 before settling at Rs 191, down 13.18 per cent from its issue price of Rs 220.

On the Bombay Stock Exchange, the scrip fell over 14 per cent before ending at Rs 191.20, down 13 per cent.

The telecom tower company has a market value of Rs 36,110 crore.

With the sale of 18.89 crore shares, the company had raised Rs 4,118.01 crore, including about Rs 1,388 crore from retail investors and Rs 2,078 crore from qualified institutional buyers and high networth individuals.

The company had said it would use the proceeds from the IPO to fund expansion and acquisitions.

Bharti Infratel had raised Rs 651.7 crore from 18 anchor investors. It allocated 2.83 crore shares at Rs 230 apiece to them.

The public offer was subscribed 1.3 times.

The IPO is the biggest public issue in over two years. State-run Coal India’s initial public offer had raised about Rs 15,500 crore in October 2010.

Analysts, however, said the long-term prospects of the company looked good because of its stable business model.

In India, Bharti Infratel has over 34,000 towers across 18 states and 11 telecom circles.

Airtel, Vodafone, Idea Cellular, BSNL and Tata Teleservices are some of its clients.

The company also has a 42 per cent stake in Indus Towers — set up as a joint venture by Bharti Infratel, Vodafone and Aditya Birla Telecom to hive off the tower business in 15 telecom circles.