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PE-backed Bharti Infratel sees shares slump following mammoth IPO

28 Dec 2012

Bharti Infratel towersPrivate equity-backed telecoms tower company Bharti Infratel has seen its shares drop more than 10 per cent in its trading debut following its $760m IPO last week – India’s biggest stock market flotation for two years.

The company, which is the telecom tower unit of Indian mobile phone carrier Bharti Airtel, struggled to pick up interest from retail investors according to Reuters, which said most support had come from overseas institutional buyers.

It cited a source familiar with the IPO as saying, “It’s early days and the stock should settle in the course of the next day or two.

“If the foreign flows continue, the market will remain buoyant which should translate into more deals.

“If not IPOs, there should be more follow-on offerings.”

During its IPO Bharti Infratel sold 189 million shares priced at INR210 each for retail investors and INR220 for others, a little lower than the marketed range of INR210 to INR240 each.

Temasek’s Compassvale Investments, Goldman Sachs private equity arm GS Strategic Investments, Anadale and Nomura Asia Investment were previously reported to be participating in the IPO.

Private equity investors that own a combined 13 per cent stake in Bharti Infratel also include KKR, Macquarie, Citigroup, Investment Corporation of Dubai and AIF Capital.

The IPO was the biggest since state-backed Coal India raised $3.5bn through an IPO in 2010.

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