Offer seen fairly valued at lower band of price range
According to their estimates, the fair value of the issue was expected to range between 8.5 and 12 times its EV/Ebitda. As per the announced price range for the BIL ipo, this multiple is pegged at 10.5 to 12 times its annualised June quarter Ebitda.
“The issue is attractive at the lower end of the price range, given that it is one of the better tower companies with no debt in its standalone balance-sheet,” said an analyst from an institutional desk of a brokerage house.
BIL is a subsidiary of Bharti Telecom, in which the latter holds 86.1% stake. The subsidiary, with the capacity of about 80,000 towers more, holds 42% of Indus Towers, a joint venture between Bharti Airtel, Vodafone India and Idea Cellular.
In the past, some experts have questioned Bharti's rationale behind the stake sale in BIL, given that the cash-rich company has lower leveraging compared to its peers and does not require an imminent capex push.
Nomura, in a note in October, said that BIL could be one of the lowest geared power company compared with regional and global players whose net debt are three to five times their operating profits.
As per the Ipo prospectus, BIL's Ebitda for three months to June 2012
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