December 1, 2012

Market Pulse - Dec 1, 2012


Bharati Infratel IPO to open on 10 December 2012.
Bharti Infratel, the telecommunication tower arm of cellular operator Bharti Airtel, is set to raise Rs 4,000-4,500 crore through the country’s biggest initial public offering (IPO) in two years. It has set a price band of Rs 210-240 a share for the entry, scheduled to open on December 10 for foundation investors and close on December 14 for retail subscribers. The issue will constitute 188.9 million shares, including 146.2 million new shares or 10 per cent of Bharti Infratel.

According to the company, it could raise up to Rs 4,530 crore at the upper band and Rs 3,970 crore at the lower band. This would be the largest IPO after Coal India which raised Rs 15,199 crore, and was subscribed 15.2 times in November 2010. Bharti Infratel has a little more than 33,000 telecom towers and the company also holds a 42 per cent stake in the world’s biggest tower company, Indus Tower.

Telecom tower companies mainly get revenue from leasing of infrastructure to mobile phone carriers. With reforming and fresh auction of spectrum, and more clarity in policy, he says telcos are expected to invest again from March, to expand and also roll out third generation services for better utilisation of the towers. There are about 5,76,000 telco tenants, in about 3,60,000 towers across the country.

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