Bharti Infratel to use IPO Proceeds For Towers

Bharti Infratel, a subsidiary of telecom operator Bharti Airtel, will use the proceeds of its Initial Public Offering (IPO) to set up 4,813 new telecom transmission towers and upgradation its existing ones.

The company was looking at raising about Rs 5,000 crore through the IPO and had filed the Draft Red Herring Prospectus (DRHP) last week. The public offer would constitute an offer of 18.89 crore shares, comprising a fresh issue of 14.62 crore equity shares by the company and an offer for sale of 4.26 crore shares by existing shareholders.

It has proposed to use about Rs 1,086 crore of the proceeds for the installation of the 4,813 towers across seven circles.

The new towers would be a combination of ground based towers and roof top towers.The new towers would be set up in FY14, FY15 and FY16, it said in the filing.

Bharti Infratel had also proposed to deploy about Rs 1,214 crore of the net proceeds for upgradation and replacement of existing towers. This is to enhance capacity for additional sharing of towers.  As of June 30, Bharti Infratel, which holds a 42 per cent stake in independent tower firm Indus Towers, owns 33,446 towers across 11 circles.Indus Towers has 1,09,539 towers across 15 circles.

Vodafone India holds a 42 per cent stake in Indus Towers, while Aditya Birla Telecom (an Aditya Birla group company) owns the remaining 16 per cent. Private equity investors including Kohlberg Kravis Roberts & Co, Macquarie Group, Citigroup, Investment Corporation of Dubaiand AIF Capital own a combined 13 percent stake in Bharti Infratel.

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  • Irshad September 21, 2012 3:05 pm

    Why not Bharti Infratel buy infra from Reliance. Why public pay for Bharti Airtel’s infra requirements. Both companaies are owned by same people.

  • ARJUN CHANDRASHEKAR September 20, 2012 12:09 pm

    The Worst infra is of Airtel.No Indoor coverage in Most of the Interior rural areas in Karnataka Where IDEA / BSNL is having Widest Indoor Coverage in Interior rural Areas. It Seems that they are going to upgrade their BTS in Towns

  • Saurabh September 19, 2012 4:39 pm

    Infrastructure has been a beaten down sector from last 2 years and investors have burnt their hands. As far as BIL IPO is concerned, the valuations are too high. I mean, they are looking to divest 10 percent @Rs.5000 crores or $925mn which values the company at around Rs.50,000 crores, which, in no terms looks attractive. So from my side it is a complete no no. We already witnessed what happened with GTL Infra.

    The IPO prices is expected at in the price band Rs.250 to Rs.265. DRHP has been filed but it will take around 3-6 months for issue to hit the market.

    sreenivasa reddy :there is a chance the company may issue the shares of airtel.

    Bharti Airtel Limited is a different entity and they have cleared that company will not participate in Infratel’s IPO. Also Airtel is in no mood to come up with a FPO i.e Follow-On Public Offer as they know it will not attract investors.

    Bharti Airtel’s stock price in secondary market has fallen drastically in last 3 months amid numerous concerns and trading near its all time lows. Currently it is at Rs.268.35 (bounce from Rs.239) and I expect it to decline further as concerns over one-time spectrum fee is still there and DoT is going to have final say on it by October-end. Beside this the huge debt-burden is keeping investors on egde. Company has already invested huge sums for 3G/4G spectrum and more funds will be required for 3G/4G network expansion. License renewal is also on the cards starting 2014.

    So Avoid Bharti Airtel. If you think it’s cheap, think again!

    If someone really wants to get into telecom sector Idea Cellular looks a good bet instead of Airtel.

  • sreenivasa reddy September 19, 2012 12:44 pm

    there is a chance the company may issue the shares of airtel.

  • Praveen September 19, 2012 12:31 pm

    I don’t know how a inverstor will benefit in this IPO? ALl the money will be spent to install towers and this company won’t have any pricing power i.e they had to take how much AIRTEL can give to them and they can’t ask them more. So an Investor won’t get much in this IPO