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Bharti Infratel IPO gets fully subscribed

The initial public offer of Bharti Infratel got fully subscribed on Thursday, which was also the last day for institutions to submit their bids.

The initial public offer (IPO) of Bharti Infratel got fully subscribed on Thursday, which was also the last day for institutions to submit their bids. According to data available on stock exchanges, the overall issue has been subscribed 1.21 times.

Meanwhile, the institutional portion of the IPO was subscribed nearly three times.

While FIIs bid for 18.02 crore shares, domestic financial institutions and mutual funds put in bids for 33.49 lakh shares and 43.48 lakh shares, respectively. A total of 6.61 crore shares were reserved for institutional investors. The retail and HNI portions, however, are yet to receive a significant number of bids. The IPO closes on Friday.

This is the first IPO in 10 years from the Bharti Group and the biggest issue since that of Coal India two years back, when the government-owned miner raised R15,475 crore. Bharti Infratel is the tower arm of the country?s largest telecom operator Bharti Airtel.

The quantum of demand in the institutional portion is much lower compared to the IPOs of Credit Analysis and Research (Care) and PC Jeweller, both of which closed a couple of days back.

While rating agency Care saw its institutional portion getting subscribed a massive 45.8 times, that of PC Jeweller was subscribed 7.33 times. The issue size of Bharti Infratel at approximately R4,500 crore is, however, much larger than that of Care (R540 crore) and PC Jeweller (R609 crore).

On Monday, Bharti Infratel allocated 2.8 crore shares to 18 anchor investors at R230 per share amounting to R651 crore. The price band for the IPO has been fixed between R210 and R240 per share. The anchor investors included Alliance Bernstein, Battery March, Clough Capital, Columbia Wagner, Morgan Stanley, Route One Capital and Sundaram Mutual Fund, among others.

The IPO of Bharti Infratel has been assigned a 4/5 grading by ratings agency Crisil, indicating that the fundamentals of the issue are above average related to other listed equity securities in India. Domestic brokerage houses, however, are divided about the attractiveness of the issue.

Some analysts believe the issue is fairly priced and have recommended clients to subscribe at the lower end of the price band. Others said the issue should have been priced at a discount to its global peers given low entry barriers in the business and oversupply in domestic tower capacity.

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First published on: 14-12-2012 at 03:08 IST
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