Bharti Infratel Ltd, the mobile tower unit of Bharti Airtel Ltd, has set a price band of Rs 210-240 a share for its initial public offering.

The issue will open on December 10 for cornerstone or institutional investors and to the public on December 11. The issue will close on December 14. The issue closes on December 13 for Qualified Institutional Buyers (QIB) bidders. The company plans to raise about Rs 4,500 crore at the upper end of the price band.

The offering is for 18.89 crore shares or 10 per cent of Bharti Infratel. The minimum bid lot has been fixed at 50 equity shares and in multiple of 50 equity share thereafter. The retail discount on per share basis is 10 an equity share. The retail discount will not exceed 5 per cent of the issue price.

This is set to be India's biggest IPO in two years after state-run Coal India Ltd raised $3.5 billion in October 2010.

Allocation

Not more than 50 per cent of the issue shall be available for allocation on a proportionate basis to QIBs. Five per cent of the QIB portion, excluding the anchor investor portion, shall be available for allocation on a proportionate basis to mutual funds only. The remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIB bidders, including mutual funds, subject to valid bids being received at or above the issue price.

Further, not less than 15 per cent of the issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35 per cent of the Issue shall be available for allocation to Retail Individual Bidders.

Airtel not offloading

Based on the price band, Bharti Infratel will have a market capitalisation of Rs 39,660 crore to Rs 45,330 crore. Bharti Infratel is selling 14.62 crore new shares in the IPO, while four of its shareholders including arms of Singapore state investor Temasek and Goldman Sachs are selling 4.27 crore shares. Bharti Airtel, which owns about 86 per cent of Bharti Infratel, is not selling any shares.

Bharti Infratel has over 34,000 towers across 18 States covering 11 telecom circles and also holds a 42 per cent stake in Indus Towers, which has around 1,10,000 towers. In terms of installed tower base the company has 29 per cent market share including Indus.

Bank of America Merrill Lynch, J.P. Morgan, Standard Chartered, Deutsche Bank, HSBC, UBS, as well as India's Kotak Mahindra and Enam are advising Bharti Infratel on the IPO.

The offer comes at a time when the telecom industry is facing huge pressures both from the market and on the regulatory side. Most telecom companies have slowed down rollouts which in turn has cut down business for tower companies. While stand-alone tower firms are finding it tough, companies owned by mobile operators are better placed because of assured anchor tenants.

The equity shares offered through the issue are proposed to be listed on the NSE and the BSE. NSE is the Designated Stock Exchange for the Issue.

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