Bharti Infratel IPO sails through on FII tailwind

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fe Bureau: Mumbai, Dec 15 2012, 01:22 IST

The initial public offering (IPO) of Bharti Infratel — the largest since Coal India (CIL) hit the markets more than two years ago — closed successfully on Friday thanks to strong interest from institutional investors. The tower company, a subsidiary of Bharti Airtel, India’s largest telecom operator by subscribers, should mop up close to R4,500 crore. CIL had raised R15,475 crore issue in October 2010 just before the Sensex hit a lifetime high in early November.

Retail investors and high net worth individuals (HNIs) by and large stayed away from the issue. Data on stock exchanges showed the IPO was subscribed 1.3 times with bids coming in for 20.82 crore shares against the 16.06 crore shares on offer in the price band of R210 to R240 apiece.

The institutional portion of the IPO was subscribed 2.84 times with foreign investors accounting for bulk of the bids — 18.02 crore shares — amounting to more than R4,300 crore. Domestic financial institutions and mutual funds bid for 33.49 lakh and 43.48 lakh shares, respectively. However, the quotas reserved for retail investors and HNIs were subscribed only 0.2 and 0.3 times, respectively. The scrip is expected to be priced at R225 a piece.

The strong institutional demand for Bharti Infratel comes at a time when foreign institutional investors (FIIs) have been bullish on Indian equities. In 2012 so far, FIIs have put in more than $22 billion into Indian stocks, the second-largest amount in a year since FIIs started investing in India in 1993.

Huge inflows from

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