Bharti Infratel IPO gets muted initial response

Receives bids for 72.67 lakh shares The initial public offer (IPO) of Bharti Infratel received bids for 72.67 lakh shares till 16:00 IST on first day of the bidding for the IPO today, 11 December 2012. The issue was subscribed 0.05 times. The issue closes on 14 December 2012. The company is issuing 14.62 crore equity shares of face value of Rs 10 each in the price band of Rs 210 to Rs 240 per share. Along with the fresh issue, there is an offer for sale of 4.26 crore equity shares by existing shareholders viz. Compassvale, GS Strategic, Anadale, Nomura, and Fabrikant HK Trading. There is a discount of Rs 10 per share for retail investors. The board of directors of Bharti Infratel on Monday, 10 December 2012, finalized allocation of 2.83 crore equity shares to a total of 34 anchor investors at Rs 230 per share. Among the anchor investors, Morgan Stanley Mauritius Company will be allotted 97.11 lakh shares. Citygroup Global Markets Mauritius will be allotted 52.10 lakh shares. Columbia Acorn International will be allotted 27.17 lakh shares. Wellington Management Company, LLP A/C BAY POND MB will be allotted 22.66 lakh shares. Wellington Management Company, LLP A/C BAY POND BMD MB will be allotted 14.20 lakh shares. Route One Invt Company L.P. A/c Route One Fund I LP will be allotted 10.86 lakh shares. Route One Invt Company L.P. A/C Route One Offshore Master Fund LP will be allotted 10.45 lakh shares. Bharti Infratel's main business is to acquire, build, own and operate towers and related infrastructure and to provide access of its towers to wireless telecommunications service providers on a shared basis under long-term contracts. The company has 34,220 own towers in 11 telecom circles and 42% equity interest in Indus, which has about 1,10,561 towers in 15 telecom circles. Thus, on a consolidated basis the company operated in 22 telecom circles, with economic interest in 80,656 towers, in India at end September 2012, making it one of the largest tower infrastructure providers in India. The proceeds from the IPO will be used for installation of 4,813 new towers, upgradation and replacement of existing towers, various green initiatives at tower sites, and other general corporate purposes. The IPO proceeds can also be used for future inorganic growth opportunities. Cellular services major Bharti Airtel holds 86.1% stake in Bharti Infratel. Post IPO, Bharti Airtel's stake will come down to 79%. Bharti Airtel is not offloading any stake through the current offer for sale.