Bharti Infratel files for IPO, likely to raise $1 bn

Last Updated: Sat, Sep 15, 2012 07:22 hrs

Bharti Infratel, the mobile phone tower arm of India’s leading telecom player Bharti Airtel, on Friday filed its draft prospectus for an initial public offering (IPO) with market regulator Securities and Exchange Board of India (Sebi).

The offering, which comprises both fresh issue and offer for sale from existing investor, is looking at raising close to $1 billion (Rs 5,500 crore) from the market, said people with direct knowledge of the matter.

Bharti Airtel, which owns 86 per cent stake in the company, will not tender its shares in the IPO.

Only seven IPOs have raised more than Rs 5,000 crore so far
  IPO date Issue size (Rs cr)
Coal India Oct-10 15,199
Reliance Power Jan-08 11,700
DLF Jun-07 9,188
Reliance Petro Apr-06 8,100
NHPC Aug-09 6,039
NTPC Oct-04 5,368
Cairn India Dec-06 5,261
Source: BS Research Bureau 

“The issue constitutes a fresh issue of equity shares by Bharti Infratel and an offer for sale portion by Compassvale Investments, GS Strategic Investments, Anadale and Nomura Asia Investment (IB),” said Airtel in a filing to the Bombay Stock Exchange (BSE).

“Bharti Airtel has now informed BSE that the committee of directors of Bharti Airtel has decided not to participate in the offer for sale of equity shares in the proposed issue,” said another filing.

According to sources, 75 per cent of the offering will be of fresh shares and the proceeds will be used for future capital expenditure.

The IPO, which is likely to be the biggest since Coal India’s in 2008, is likely to be launched in January 2013. Coal India had raised more than Rs 15,000 crore through India’s largest ever IPO in October 2010.

Some other shareholders in Bharti Infratel include including Goldman Sachs, Macquarie Group, Citigroup, Kohlberg Kravis Roberts & Co and Investment Corporation of Dubai.

Shares of Bharti Airtel on Friday ended Rs 1.45, or 0.57 per cent higher at Rs 255.1, underperforming the benchmark indices which rallied over two per cent.

Bharti Infratel owns and operates over 33,000 mobile phone towers. It also holds 42 per cent stake Indus Towers, which is the world’s biggest telecoms tower company, with about 110,000 towers.

Tower companies derive revenues by leasing infrastructure to mobile carriers.

Standard Chartered, Barclays, JPMorgan, Bank of America-Merrill Lynch, HSBC, UBS, Kotak Mahindra and Enam Securities will be the lead book running managers for the IPO.

Due to unfavourable market conditions many companies have had to put off their share sale plans this year. This year 16 companies have raised only Rs 3,067 crore through IPOs, about 45 per cent lower than the Rs 5,568 crore raised by 29 companies during the same period last year.

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