Bharti Airtel to return to Street with Infratel; looking to rai

• Posted by Sindhuri G August 28, 2012 - Filed in Arts & Culture - 1,950 views

  NEW DELHI: Bharti Airtel, the country's largest telecom company, is once again exploring the option of listing its tower arm, Bharti Infratel, to raise funds for itself and provide an exit option to PE firms that had invested $1.25 billion in the tower company five years ago.
  
  "The company has started working on the draft red herring prospectus and expects to file it with market regulator Sebi by August-end or September-beginning. It is likely to list December-end to raise Rs 4,000-4,500 crore, depending upon regulatory approval and market sentiments," said a person directly involved in the process, requesting anonymity as the process is underway.
  
  If the proposed IPO goes ahead, it will be the largest after Coal India's Rs 15,000-crore listing in February 2010. The parent company, Bharti Airtel, has also been weighing the possibility of issuing its own shares to the public or to institutional investors.
  
  It is unlikely that the group will go for two floats at the same time, and will have to zero in on one company for the fund-raising exercise. Bharti Airtel has a debt of $12.7 billion and has been looking at ways to bolster its finances.
  
  Bharti Infratel has invited leading global investment banks for presentations on Monday and expects to finalise the names of its merchant bankers soon, said an official familiar with the development.
  
  " Bank of America Merrill Lynch, Deutsche Bank, JPMorgan and HSBC, among others, are expected to participate in the process on Monday," he said.

  

  Standard Chartered Bank, which has been closely associated with the group for quite some time, has already started preparatory work on the tower company's IPO, said this person.
  
  Not Examining IPO Option First Time
  
  Last fiscal, Bharti Infratel reported a net profit of Rs 687 crore and a turnover of Rs 9,511 crore, which includes a proportionate share of its revenues in Indus Towers, a three-way JV with Vodafone and Idea Cellular. Bharti Airtel owns 33,660 towers in 11 circles in addition to a 42% stake in Indus Towers, which has a portfolio of 109,318 towers.
  
  This is not the first time that Bharti Infratel is examining the IPO option. People familiar with the development said the company had called off its IPO plans as the other two partners of Indus had suggested that the tower companies be merged and then the combined entity be listed.
  
  On August 8, Bharti Infratel took board approval to increase its authorised capital, but it is unlikely to issue fresh shares as it does not require funds as of now.
  
  The proposed IPO is likely to comprise an offer for sale by the existing shareholders, including Bharti Airtel and the PE firms. The company has appointed a committee of directors to consider the listing of shares of the company.
  
  Bharti Airtel has also constituted its own committee of directors to consider and finalise the terms and conditions of its proposed participation in the offer for sale.
  
  Six PE firms, including Singapore's Temasek, The Investment Corporation of Dubai, Goldman Sachs, Macquarie, AIF Capital, and Citigroup & India Equity Partners, had invested $1 b in December 2007 while KKR had invested another $250 m in February 2008 in Infratel.