* IPO price band set at 210-240 rupees/share
* Bharti Infratel IPO to be India's biggest in two years
* Range values Infratel at 9-10.5 times forward EV/EBITDA
* Temasek, Goldman Sachs arms to sell shares
By Devidutta Tripathy and Sumeet Chatterjee
NEW DELHI/MUMBAI, Nov 30 Bharti Infratel Ltd,
the telecommunications tower unit of top Indian phone carrier
Bharti Airtel Ltd, is set to raise up to $825 million
next month in what would be the country's biggest initial share
offering in two years.
Bharti Infratel, which will sell shares at a discount to
global peers, is one of several Indian firms due to sell shares
by the end of the year, tapping a revival in investors' appetite
for risk after a slack first half.
The company set a price band of 210-240 rupees per share for
its initial public offering, which will open on Dec. 10 for
cornerstone investors and a day later for the public, closing on
Dec. 14, it said on Friday.
The sale of 188.9 million shares, or 10 percent of the
company, is set to be the country's largest since state-run Coal
India Ltd raised $3.5 billion in October 2010.
At the upper end of the price band, Bharti Infratel would
raise about 45.3 billion rupees ($825 million).
Bharti Infratel will sell about 146 million new shares,
while four of its stockholders, including arms of Singapore
state investor Temasek and Goldman Sachs, are
selling 42.7 million shares, according to a regulatory filing.
Billionaire Sunil Mittal's company Bharti Airtel, which owns
about 86 percent of Bharti Infratel, will not sell any shares.
Indian businesses raised $7.1 billion from share offerings
in the first half of this year, down 4 percent from the same
period in 2011, according to Thomson Reuters data, but the
country's IPO market is poised to end the year with a flourish.
The Indian government plans to raise roughly $1.2 billion by
selling shares in miner NMDC Ltd on Dec. 13, sources
said on Thursday. That could be preceded by a handful of
smaller, private sector IPOs.
"I'm sure there will be lot of issues waiting to happen if
the market revives. A lot depends on valuations and whether
investors make money out of it," said Srividhya Rajesh, a fund
manager with Sundaram Mutual Fund.
Bharti Infratel shares will be sold at a discount to global
peers, with a forward EV/EBITDA (enterprise value/earnings
before interest, tax, depreciation and amortisation) ratio of
9-10.5 times, based on the indicated range, the company said.
That compares with 17.8 times at American Tower Corp
and 17.2 times at Crown Castle International Corp.
Indonesian tower firm PT Tower Bersama Infrastructure
trades at 17.6 times its forward EV/EBITDA.
A sector analyst who declined to be named said the pricing
was relatively cheap due to the uncertain economic environment.
Bharti Infratel's profit was up 36 percent to 7.5 billion
rupees in the fiscal year that ended in March, the company said.
It has more than 34,000 mobile phone masts and holds a 42
percent stake in Indus Towers, the world's biggest tower
company. With Indus, it has a 37.8 percent share of the national
Mast companies earn their revenue from leasing
infrastructure to mobile phone carriers. A court order this year
revoking several carriers' operating permits has weighed on
demand, but mast owners expect it to pick up as carriers expand
data services on third and fourth-generation networks.
Bank of America Merrill Lynch, JPMorgan,
Barclays, Standard Chartered, Deutsche Bank
, HSBC and UBS, as well as India's
Kotak Mahindra and Enam, are advisors for the IPO.
The shares will be listed on India's Bombay Stock Exchange
and National Stock Exchange, the company said in a statement.