State-run TCIL's 30% stake in Bharti Hexacom valued at around Rs 8,900 cr

The government has valued the 30 per cent stake of state-run TCIL in Bharti Hexacom at around Rs 8,900 crore, based on a formula suggested by SBI Capital Markets, an official source said.

Bharti Airtel holds 70 per cent stake in Bharti Hexacom, which provides telecom services in Rajasthan and Northeast. The government holds the remaining 30 per cent stake in the company through Telecommunications Consultants India Limited (TCIL).

A proposal for TCIL selling its stake and exiting the joint venture has been pending for over 15 years.

"Based on present valuation and market cap of Bharti Airtel, TCIL stake in Bharti Hexacom stands at around Rs 8,900 crore. This keeps changing based on the market cap of Bharti Airtel.

"The final value that the government will get is dependent on the time of exit from the JV and market cap of Bharti Airtel," the source, who did not wish to be named, said.

Bharti Airtel has the first right of refusal for TCIL's stake.

The valuation formula has been suggested by SBI Capital Markets (SBI Caps) and the government will decide on the time for exit after the Department of Investment and Public Asset Management (DIPAM) approves the proposal.

"If the government decides to exit after Bharti Hexacom takes the IPO route, then the stake sale will take around 2 years. By that time, the valuation will be different and can't be predicted at this time," the source added.

When contacted, TCIL Chairman and Managing Director Sanjiv Kumar declined to comment on the valuation but said the company had roped in SBI Caps for assessment and the report has been submitted to the Department of Telecom (DoT).

In 2006, Bharti Airtel had offered Rs 262 crore for the 30 per cent stake, which was turned down by the then government and it had asked TCIL for revaluation.

In 2011, Deloitte suggested a valuation of Rs 1,800 crore but the then cabinet secretary K M Chandrasekhar asked the telecom ministry to re-evaluate it.

Several MPs had complained to the government that the valuation suggested by Deloitte was too low given that Bharti Hexacom had a turnover of Rs 1,700 crore and profits of over Rs 400 crore in 2010.