BHARTI INFRATEL LTD : GO FOR LISTING GAINS !!!

Price Band: Rs. 210 - Rs. 240.
Retail Discount : 5.00 % .

Face Value: Rs.10.
Minimum Lot Size: 50 Shares.

Issue opens on: 11th December 2012, Tuesday.

Issue closes on: 14th December 2012, Friday.

Listing Date on: by 24th December 2012.

Total No. of Shares offered: 18,89,00,000  shares or 10.00 %

Employee Reservation: NA.

Net Public Offer: 6,61,15,000 shares.

QIB Book: 9,44,50,000 shares or 50 % of issue.

Non – Institutional Bidders: 2,83,35,000 shares or 15 % of issue.

Retail Book: 6,61,15,000 shares or 35 % of issue.

Equity Shares outstanding prior Issue: 174,24,08,730 shares.

Equity Shares outstanding post Issue: 188,86,42,842 shares.

Total Size of the Issue: Rs. 3,966.90 Crs - Rs. 4,533.60 Cr.

IPO GRADING: 4/5 - CRISIL – Strong Fundamentals.

KEY FINANCIALS (Consolidated)	31 Mar 2010	31 Mar 2011	31 Mar 2012	30 Jun 2012
Total Income (Rs.Cr)	7,038.73	8,508.11	9,452.06	2,416.50
Net Profit (Rs. in Cr)	252.97	551.48	750.73	213.07
Net Profit margin (%)	3.59	6.48	7.94	8.81
EPS (Rs.)	1.519	3.160	4.299	1.220
Net Asset Value (Rs.)	234.60	241.00	250.10	252.80
Net Worth (Rs. Cr)	13,627.57	13,994.92	14,524.21	14,682.39
RoNW (%)	1.90	3.90	5.20	1.50

BHARTI INFRATEL LIMITED: Bharti Infratel was incorporated in 2006 and is based in   Gurgaon, India as a subsidiary of Bharti Airtel ltd, a leading global telecommunications company which currently has operations in 20 countries across Asia and Africa. Bharti Airtel and Bharti Infratel are a part of the Bharti group, one of India’s leading business conglomerates, with business interests in the telecommunications, real estate, insurance and retail sectors pioneered by Sunil Mittal. Bharti Infratel Ltd provides passive telecom infrastructure services. The company owns, deploys, and manages telecom towers and communication structure for telecom operators & wireless service providers. It currently has operation in 18 Indian states. In January 2008, Bharti Airtel transferred its towers to Bharti Infratel through a scheme of arrangement effective as of January 31, 2008. As of June 30, 2012, Bharti Airtel held 86.1 % of the equity share capital of Bharti Infratel, while the remaining 13.9 % was held by certain private equity investors. Bharti Infratel is one of the largest providers of tower and related infrastructure in India, based on the number of towers that Bharti Infratel owns and operates and the number of towers owned or operated by Indus that are represented by Bharti Infratel’s 42 % equity interest in Indus. Bharti Infratel, has more than 33,000 mobile phone masts, also holds a 42 % stake in joint venture with Indus Towers, which is the world’s biggest telecoms tower company, with about 110,000 towers.

Tower companies get their revenue from leasing infrastructure to network operators but they are going through a tough time in India as a Supreme Court order to revoke the regional licenses of eight mobile phone companies in the 15-player market has weighed on demand. Tower sharing in the wireless telecommunications sector and integrated telecommunications networks are relatively recent concepts in India. The success of the model depends on a number of factors including geography, population density in rural and urban areas, financial conditions affecting operators and customer behavioral patterns which are specific to telecommunications industries in different countries, including India. Bharti Infratel’s and Indus’ business model is based on increased sharing of towers by wireless service providers, as the addition of sharing operators at existing towers facilitates better capacity utilisation at relatively low incremental capital expense, enhancing Bharti Infratel’s and Indus’ cost and operational efficiencies. For the three month period ended June 30, 2012, Bharti Infratel had an average sharing factor of 1.82 co-locations per tower, while Indus had an average sharing factor of 1.96 co-locations per tower. Our financial prospects are directly dependent upon the sharing factor of Bharti Infratel’s and Indus’ towers and increasing their co-location rates is a key element of their growth strategy.

DETAILS	FY11	FY12	H1'FY13	FY13
Number of towers	78,442	79,064	80,656	81,088
Tenancy (x)	1.75	1.85	1.90	1.93
Net Sales (Rs. Cr)	8,508	9,452	4,972	9,777
EBITDA	3,128	3,539	1,844	3,677
EBITDA (%)	36.80	37.40	37.10	37.60
Net Profit (Rs. Cr)	551.48	751	460	852
Change Y-o-Y (%)	118.00	36.10	-----	13.40

Out of the Offer of a total of 18,89,00,000 Equity Shares -  3,00,46,400 Equity Shares are being offered by Compassvale; 60,09,280 Equity Shares are being offered by GS Strategic; 36,05,568 Equity Shares are being offered by Anadale; 30,04,640 Equity Shares are being offered by Nomura. The Equity Shares being offered by the Selling Shareholders under the Offer have been held by such Selling Shareholders for a period of more than one year prior to filing of the Draft Red Herring Prospectus with SEBI. Bharti has mandated eight banks for managing the IPO, with Standard Chartered as its lead banker, other banks managing the share sale are Barclays, JPMorgan, Bank of America Merrill Lynch, HSBC, UBS, and Kotak Mahindra and Enam Securities.  
According to me one should look for subscribing Bharti Infratel Ltd IPO as it will be the first listed Telecom Tower company on Indian bourses taking the country at par with world markets. Long term investors should look into subscribing the IPO for good opportunity. Short term investor can subscribe for listing gains.