Sebi cleared Bharti Infra IPO after adequate disclosures: Govt

The company, which is part of telecom giant Bharti Airtel group, raised over Rs 4,000 crore through its IPO

Government today said that Sebi had cleared telecom tower firm Bharti Infratel's public offer after adequate disclosures were made in its IPO prospectus to address the issues raised by the market regulator itself and in the complaints received with regard to the offer.

The company, which is part of telecom giant Bharti Airtel group, raised over Rs 4,000 crore through its Initial Public Offer (IPO) in December last year and its shares were subsequently listed on the bourses on December 28.

A total of 18.89 crore Bharti Airtel shares were issued in the IPO. The company's shares are currently trading near Rs 185 level, as against its issue price of Rs 220 a piece.

Replying to a Lok Sabha question with regard to this IPO, Minister of State in Finance Ministry Namo Narain Meena said in a written answer that the Sebi had asked the merchant bankers for the public issue to make certain additional disclosures in the draft prospectus after its scrutiny.

On whether Sebi had given its approval despite repeated complaints from various quarters, the Minister said Sebi had accorded the approval after adequate disclosures were made in the company's draft prospectus.

"The present legal and regulatory framework is primarily based on disclosures. The draft offer document is required to contain all disclosures and undertakings" specified by the Companies Act and the relevant Sebi regulations to enable investors to make an informed investment decision, Meena said.

The Minister said Sebi examines the draft offer documents with an objective to enhance disclosures and the observations are issued to the lead merchant banker to incorporate necessary changes.

As per practice Sebi had forwarded the complaints to the Book Running Lead Managers of the issue and the corresponding replies received were analysed by the market regulator, Meena added.

Following this, Sebi had advised the lead managers to make additional disclosures in the prospectus wherever required.

Accordingly, Sebi scrutinised the prospectus to check whether the disclosures made were adequate or if certain additional disclosures were required, Meena said.

Upon analysis, Sebi in a observation letter advised the lead managers to add/update/modify certain disclosures, he added.

In this regard the observations by Sebi issued to lead managers of Bharti Infratel included those related to compliances with minimum public shareholding norms, taxation, financial statements, among others.

Moreover, observations included those pertaining to the disclosures with regard to complete profile of Bharti Airtel's Chairman Sunil Bharti Mittal along with other directors and promoters, Meena said.

According to the Minister, the lead managers were also asked to include "certain details related to IPO grading, application supported by blocked amount (ASBA) etc in the offer document".

Meena said, the lead managers had incorporated the changes in the offer document and informed the same to the regulator through various letters between November-December, 2012.