Bharti Infratel, one of the largest telecom tower infrastructure service providers in India, is set to list its equity shares on the BSE and NSE on Friday, December 28, 2012. This is the third issue back-to-back after CARE and PC Jeweller, which both traded in premium and closed higher on listing days. However, investors look sceptical about the listing of tower company tomorrow as sources say the issue was trading at a discount in grey market.
Experts expect the stock is going to debut on the bourses at around Rs 200 and will continue to trade in a range of Rs 204-220. But the important point, according to experts, is whether the stock will hold Rs 200 level or not on closing basis?
In an interview with Moneycontrol.com, IPO Analyst Arun Kejriwal said that the stock would not fall below Rs 200 on listing day. “The cost for the retail investors is Rs 210 and Rs 220 for QIBs & HNIs. Grey market premium is Rs 212, which means premium of Rs 2 for retail while discount of Rs 8 to other investors. So the trading range for the stock comes to Rs 204-220,” he explained.
According to him, the non-retail price of Rs 220 is significant as this was the price Rs 219.38 to be precise at which PE investors invested in Bharti Infratel in March 2008. “In rupee terms other than the dividends given by the company there has been no gain for investors in 57 months. However in dollar terms there has been a substantial loss as the investment was made at a rupee dollar parity of 39 while currently the currency has depreciated to 54-55 to the dollar,” Kejriwal added.
However, SP Tulsian of sptulsian.com feels the stock can fall to about Rs 180-190, citing weak response from retail and high networth individuals.
Tulsian told CNBC-TV18, "I have been taking my call at Rs 200-210 as the fair price when the company went public. But considering the lukewarm response where high networth individuals (HNIs) and retail both remained away and rightly so because the valuations looked very stretched to them. Infact because of that I do not think the participation is likely to be there even of the retail and HNIs even post listing. That can make the share price fall to about Rs 180-190. The issue having practically acquired by the overseas or maybe the institutional investors maybe because of the low float, because of their active participation in the market post listing that can make the share to trade at above Rs 210-220. But I am keeping my slight negative stance which I was holding with a valuation call at Rs 200-210 at the time of initial public offering (IPO). Now it should rule at about Rs 190-200."
He further adds, "Bharti Infratel will list at around Rs 200." According to him, one should not be in a hurry to buy the stock. The fair price of the stock is Rs 180, he added.
The issue, which opened for subscription during December 11-14, was oversubscribed 1.30 times. The reserved portion of QIBs was oversubscribed 2.84 times while non-institutional and retail investors' portion subscribed just 0.29 times and 0.19 times, respectively.
A subsidiary of country's largest telecom operator Bharti Airtel received more than Rs 3,200 crore through fresh issue of over 14.62 crore equity shares while the rest of amount that raised through offer for sale of over 4.26 crore shares was received by Goldman Sachs, Anadale, Nomura and Compassvale / Temasek.
The company that has a pan India presence with operations in all 22 telecommunications circles intends to use issue proceeds for installation of 4,813 new towers; upgradation & replacement on existing towers; and green initiatives at tower sites.