FE Editorial : It’s IPO time folks

Sunil Bharti Mittal must be a happy man. In all the gloom and uncertainty of spectrum auctions and regulatory overhang, Bharti Infratel, a towerco owned by Bharti Airtel, of which Mittal is chairman and MD, has managed to place some 189 million shares with investors which should fetch it a handsome R4,500 crore. The Initial Public Offering (IPO) couldn’t have been better timed; the stock markets have been on a roll putting on 16% in the last six months with most of this, or roughly 11%, gained in the last four months.The rally has been driven by foreign portfolio investors who seem to be convinced the Indian economy has started bottoming out and that the government will manage to push through some policy reforms, which, in turn, will help revive corporate earnings. FIIs have been big buyers of Indian equities, shopping for close to $22.5 billion worth of stocks so far in 2012—that’s the second largest amount ever bought in a year since they were allowed into India two decades ago. To their baskets they have added the shares of state-owned NMDC, which sold 10% of its equity last week, and now Bharti Infratel.

Indeed, that the the quota reserved for institutional investors in the Infratel IPO was subscribed nearly three times is a big vote of confidence both for the India story as also the Bharti group.The Infratel IPO, priced in the a band of R210-240 per share, was valued more or less

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