Bharti Tele-Ventures fixes IPO floor price at Rs 45

Updated: Jan 24 2002, 05:30am hrs
Bharti Tele-Ventures Limited (BTVL), promoted by Bharti Telecom, has fixed the floor price at Rs 45 for its maiden initial public offering (IPO). The issue will open for bidding on January 28 and will close on February 2. The listing of Bharti Tele-Ventures will take place within three weeks of book closing. This was announced by Bharti Tele-Ventures chairman and group managing director Sunil Bharti Mittal at a press conference in Mumbai and by Bharti Enterprises joint managing director Akhil Gupta in New Delhi.

Basic sops for AirTel subscribers
Bharti Telenet is planning to offer an incentivised bundle of services to existing cellular subscribers of group company AirTel, when it launches its basic telecom services in Delhi next month.
According to Bharti Enterprises president (basic services) Badri Aggarwal, “we will bundle our basic service offering with our cellular services and offer special incentives to existing AirTel customers.” The company is also expected to offer free Internet connections along with every new connection, as it has done in other states where it operates basic telecom services.
The book running lead managers for BTVLs IPO will be JM Morgan Stanley and DSP Merrill Lynch. The companys shares will be listed at the stock exchanges in Mumbai and Delhi besides the National Stock Exchange (NSE).

This issue, which will be the first to use the 100 per cent book building route, will be to fund BTVLs cellular and fixed-line services for its additional circles. The company will offer 18.53 crore shares at a face value of Rs 10 for each share. Post issue, the company will dilute 10 per cent of its equity share capital.

It will mop up at least Rs 833.85 crore at the floor price.

Out of the total issue size, 60 per cent will be allocated to QIBs (qualified institutional buyers) on a discretionary basis while 15 per cent will be allocated to non-institutional investors and 25 per cent will be allocated to retail investors on a proportionate basis.

The application by the non-institutional investors will be for a minimum of 1,000 shares and retail investors can apply for a minimum of 100 shares and in multiples thereof. The applications will have to be accompanied by cheques, demand draft to the extent of shares applied for and no cash will be accepted.

The bidding will also be accepted through the stock invest facility, said Mr Nimesh Kampani, chairman, JM Morgan Stanley. He added that this issue process will not allow multiple applications which is in line with Sebi guidelines.

The company also announced opening of bidding centres in all the 20 cities that have a stock exchange and bids for the issue can be made for a minimum of 100 shares and at a price above the floor price in multiples of Re 1.

According to Mr Kampani, the issue will target the small investor. Since it is being offered in multiples of 100, we want to encourage maximum participation from the small investor, he added.

For this purpose, the company has requested the Securities and Exchange Board of India (Sebi) to allow cut-off point as an option for retail investors, said Mr Gupta. Cut-off point will be the final price which will be determined in consultation with investment bankers based on book building, he explained. The cut-off point will be announced by the company on February 4, he added.

Any application below the cut-off point will be disqualified. Investors applying at the cut-off point only have to pay at the rate of Rs 45 per share right now and the balance can be paid after the allocation of shares, added Mr Gupta.

The proceeds of the issue will be used to part-fund the Rs 4,800 crore expansion plan chalked out by the company for the next three years. Bharti Tele-Ventures is embarking on a major expansion plan in the next few years and will be setting up cellular services in nine additional circles, four fixed-line circles and national and international long distance services, Mr Gupta said.

The company has already put in Rs 2,100 crore and the balance will be funded from the proceeds of the IPO and internal accruals, added Mr Gupta. The current debt-equity ratio of the company is 0.27 per cent.