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Saturday, December 1, 2012

towering bucks...bharti infratel

The upcoming IPO of Bharti Infratel aims to raise about Rs.4,500 crores at the price band of Rs.210-240. Representing a public offer of 18.89 crores shares (about 10% of total shares outstanding), the market value of the company will be almost Rs.45,000 crores.

If the issue becomes successful, the promoters will be richer instantly - some of them will cash out some part of their holding at some (significant) profit. Bharti Airtel, reportedly holding about 86% of Bharti Infratel, will see its shares worth Rs.38,700 crores.

Just for comparison, Reliance Com equity is currently worth about Rs.15,000 crores. This means Bharti's tower business itself is supposed to be 2.5 times more valuable than Reliance Com. It is best left to the investors to ponder over this matter than anyone else.

What is uncertain at the moment is how much the (potential) investors will make out of this IPO. This game is best played on batting-first-hitting-quick basis - those who start off first and get out early stand any chance of benefiting from the momentum, if there is any. History suggests that on average the late comers haven't had much to gain.

Let the play begin!

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