Bharti Infratel IPO fully subscribed on FII support

The Rs 4,500-crore offering of telecom tower company Bharti Infratel on Thursday received full subscription, thanks to heavy participation by foreign institutional investors (FIIs).

The company’s initial public offering (IPO), the largest since October 2010, attracted 1.21 times subscription with bids for 195 million shares as against 160.6 million on offer. About 180 million of these bids came from FIIs alone.

The qualified institutional buyers (QIBs) portion was subscribed 2.84 times, with nearly 95 per cent demand coming from foreign investors. Participation from domestic mutual funds and insurance companies remained muted. The issue closed on Thursday for the QIB segment. The wealthy and retail investor segments were subscribed nine per cent and six per cent, respectively. The issue closes tomorrow for these two categories of investors.

Bharti Infratel, a subsidiary of India’s largest telecom operator Bharti Airtel, has set the fixed band for the IPO between Rs 210 and Rs 240 per share. The company is offering a discount of Rs 10 on the issue price of retail investors.

The company is demanding a valuation of 10-12 times enterprise value (EV)/ earnings before interest, taxes, depreciation and amortisation (Ebitda), and 45-50 times the price-earning ratio (P/E) for FY14. However, the issue is at a discount to global majors, who are trading at EV/Ebitda upwards of 14 times and P/E of 47 times.

India Inc raised more than Rs 11,000 crore through equity offerings this week. Earlier this week, companies including Credit Analysis and Research and PC Jeweller saw good demand for their IPOs. The Care issue was subscribed 41 times, while PC Jeweller saw about seven times more demand than shares on offer.

Yesterday, state-run NMDC had raised about Rs 5,900 crore through the offer for sale (OFS) route.