Bharti Infratel Ltd, the tower arm Bharti Airtel Ltd, is set to raise up to INR 4,500 crores in the month of December through it IPO. The company set a price band of 210-240 rupees per share for its IPO, which will open on Dec.10 for cornerstone investors and a day later for the public, closing on Dec. 14, it said on Friday. At the upper end of the price band, Bharti Infratel would raise about 45.3 billion rupees ($825 million).
In the sale of 188.9 million shares, or 10 percent of the company, Bharti Infratel will sell about 146 million new shares, while four of its stockholders, including arms of Singapore state investor Temasek and Goldman Sachs, are selling 42.7 million shares, according to the regulatory filing.Bharti Airtel, which owns about 86 percent of Bharti Infratel, will not sell any shares.
Bharti Infratel shares will be sold at a discount to global peers, with a forward EV/EBITDA ratio of 9-10.5 times, based on the indicated range. That compares with 17.8 times at American Tower Corp and 17.2 times at Crown Castle International Corp. Indonesian tower firm PT Tower Bersama Infrastructure trades at 17.6 times its forward EV/EBITDA.
Bharti Infratel has more than 34,000 mobile phone masts and holds a 42 percent stake in Indus Towers, the world's biggest tower company. With Indus, it has a 37.8 percent share of the national tower market.
Bharti Infratel's profit was up 36 percent to 7.5 billion rupees in the fiscal year that ended in March 2012.
Bank of America Merrill Lynch, JPMorgan, Barclays, Standard Chartered, Deutsche Bank , HSBC and UBS, as well as India's Kotak Mahindra and Enam, are advisors for the IPO.
Purpose of the IPO:
The company has proposed to use about Rs 1,086.56 crore for setting up 4,813 towers across seven circles. The new towers will be set up in the financial years 2014, 2015 and 2016, according to the DRHP filed with the regulator. The new towers would be a combination of ground-based towers and rooftop towers, it said in the prospectus. The company also proposes to deploy about Rs 1,214.08 crore of the net proceeds for upgrade and replacement of existing towers. This is to enhance capacity for additional sharing of towers.