Bharti Infratel Looks Towards The IPO Route To Raise $ 845Mn

Bharti Airtel’s telecom tower subsidiary Bharti Infratel, has announced plans of an Initial Public Offer (IPO) & hopes to raise about US$ 845 Million. The IPO is supposedly the country’s largest in the past two years & will run from December 10 to 14.

State run Coal India had managed to raise US$ 3.4 Billion in 2010 via its own IPO. Since then, the Indian investor scenario pertaining to such massive IPOs have virtually dried up. In fact, many companies contemplating to ride on the ‘Sensex Boom’ had announced their own IPOs, but later withdrew, cancelled or postponed their IPO launch citing various reasons. However the real & sole reason was the drying up & slowing down of the Great Indian Economy.

Owing to poor public reactions & downfall of the Indexes, the Sensex has eroded the wealth of investors heavily. But for the past couple of months, some reforms announced by the Indian Government & overseas fund inflows (Foreign Direct Investment or FDI) has brought back some of the enthusiasm in the investors & the Indexes, namely Bombay Stock Exchange (BSE) & National Stock Exchange (NSE), have exhibited gradual upswing.  The Indexes have approximately risen by more than 11% in the last three months. Bharti Infratel’s IPO will be the first yard-stick to judge just how well the common investor has made his cautious return to the share trading market.

Though the telecom tower business is very investment heavy, Bharti Infratel has managed to inculcate some green initiatives too.  The company recently installed solar cells & hybrid generators which relied on a combination of wind, bio-fuel & sunlight as sources of fuel. Such go-green endeavors will surely enable the company to earn good grades in the minds & hearts of earth-conscious investors.

Paradoxically, a recent amendment in the Telecom Policy will soon abolish the ‘Roaming Charges’ levied on roaming users who offered a good revenue source to such infrastructure providing companies. Hence, it will be interesting to see just how well the IPO does with this dampener in the background. What are your views?

Image Courtesy | myiris

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