The R4,500-crore plus initial public offering (IPO) of Bharti Infratel received a muted response on the second day, with the issue getting subscribed 0.35 times as per details updated on the NSE website at 6.15 pm. Of the total issue size of 16.05 crore, bids were received for 5.59 crore shares on Wednesday. The IPO had received a lukewarm response on day one as well, being subscribed 0.15 times.
?As of now the numbers don’t look too bad, the demand is likely to come in on the last day. The issue should sail through but I believe the response won’t be as high as that for the CARE Ratings issue. Also, the perception about the issue has not been as agreeable as one would have expected with a Bharti name,? said a merchant banker, who didn’t want to be identified.
The issue 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. However, domestic brokerage houses 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 have said that 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.
According to market participants, a lot of high net worth individual investors (HNIs) may be waiting on the sidelines and will rush to invest only on the last day. One reason for this is that many of them may opt for IPO loans which involves interest payment. So, they may want to gauge the response to the issue on the first two days before blocking their funds.
On Monday, Bharti Infratel had allocated 2.8 crore shares to 18 anchor investors at R230 per share, amounting to R651 crore. The anchor investors included Alliance Bernstein, Battery March, Clough Capital, Columbia Wagner, Morgan Stanley, Route One Capital and Sundaram MF, among others.
Bharti Infratel is offering 18.89 crore equity shares at a face value of R10 each at a price band of between R210 and R240 per share, and is looking to raise up to R4,533.6 crore through its IPO. Bharti Group?s first IPO in 10 years would be the biggest public issue since that of Coal India two years back, when it raised R15,475 crore.
