Bharti Infratel Limited IPO Message Board (Page 3)

Dear IPO Raja, Gem IPO finder<
You are online this time kindly also give this information.

Please give the current GMP of PC Jeweller and CARE IPO. Also inform about any activity in Bharti Infra. Thanks in Advance.

dear babukalia please update latest activity in bharati

I have read all the fundamentals and read about the company..I am seeing the company is not that much bad but why for Retail Individual Investors (RIIs) its only 0.19 subscribed...Why general public havent shown interest in it..Please explain about this

becaonly u think that fundamentals are good not RII or HNI.
u must have heard this " a very good co is very bad investment at overvalued price" this is the case with this co

This is a dark horse, agreed the share is overpriced, but its in a niche sector, there are no peers in comparison, watch this share after the initial bout of selling, may surprise you on the upside

Dear friends.
BIL is not going to list in discount. Reason being negligible retail & HNI participation. These people normally take loans for applying IPO as such want to get out on listing day & thus put pressure on selling side. Many times they get panicky & sell even at loss.
In BIL there will not be such pressure since QIBs are normally long term investors. There will not be any selling pressure on listing day. Operators cannot do anything becanow a days the listing takes place in "Trade to Trade" category meaning you cannot short sell shares if you do not have them in your D,mat A/C.

THIS ONE WAS A LARGE ISSUE ABOUT 4500 CRORES. 1.21 TIMES SUBSCRIPTIONS SHOWS AROUND RS. 9000 CRORES INVESTED. CAN''T SAY LOW SUBSCRIBED.

QIB''S ARE NOT FOOL. THEY ARE SMART INVESTORS. ALTHOUGH PE IS HIGH FOR BIL. BUT SURELY SOME PROFITS ARE ON THE TABLE LEFT BY THE PROMOTORS. IT WILL LIST AT GOOD PREMIUM.

ha ha ha....

they are also "BRIBED INVESTOR".... ,

they invest thier own hardearned money and co''s money in two different way....,

anyone can play with others money but not with own money,

they are various good MF who have given negative return over last 3-5 or more years, every qib type investor invests is not honest the front their own interest before public money.

we all know how ipo subscription are manipulated even this co is not doodh ka dhula...

yes friend QIBs are not fool but we the Retailers are, they always fools us this time they are trapped many operators are among them & they will try to create a platform for there Exit we should also that one to exit & make some gains if possible.

QIBs are trapped here, operators will try everything to them be-aware retailers don`t buy on listing stop-losses & exit on any gains. Goodluck

SHARES WILL BE ALLOTTED @ 210/-. DISCOUNT TO RETAIL INVESTORS RS. 10/-. SO ALLOTMENT PRICE WOULD BE @ 200/-. WILL LIST AT PREMIUM OF RS. 15. SO ENJOYYYYYYY

it will be allotted at the price of 210 & Just hope for the gain.

bharti will list at good premium.

I applied 4 lots (200 shares) at lower band at 210 through ASBA. I had to pay Rs. 200 per share after discount. In my opinion even if shares are alloted at lower band of 210 & opens at 230 ( Allotment rate to Anchor investors ) on listing day, you will still make a gain of 15 % which is not bad.
However allotting shares at 210 is a distinct possibility since QIB portion has been subscribed 2.84 times & overall subscription is 1.28 times as such allotment may take place between 210 & 220 & only those retail investors who have applid at cutoff will get full allotment.

There is disagreement so keep away.

I applied for lower price band thru ICICIDirect.

By seeing poor response from RII.. I withdrawn the application.
Not sure whether that was a wise decision?

I hope i can buy secondary market with 20 to 30 % discount.
Any comments?

those who have applied for the full cota should withdraw there application other should sell it on listing day long term investor can buy it later around 160-65

Latest Bidding info (updated by 3:40 PM)

Qualified Institutional Buyers (QIBs):      2.84 times subscribed
Non Institutional Investors:      0.29 times
Retail Individual Investors (RIIs):      0.14 times

Total:      1.28 times over-subscribed

no friend there is no chance of gain, don''t apply

freinds,keep pescence...........dont apply this ipo
if any buddy have high risk appetite than apply as lower price band.........if retail and nii data remain same........u vl get assured allotment at lower price band.
After allotment they can exit with nominal gain on listing day.......................ROBINHOOD

if mind says ''no'' then plz don''t. listen to mind it will improve ur confidence.

Just 9% subscribed in retail category till 1pm

Bharti Infratel – Description and Profile
- Bharti Infratel (BIL) was started in 2006 as the tower subsidiary of Bharti Airtel. Revenues in FY12 were Rs9597 crores with PAT 751 cr. Operating & profit margins are 38% & 7.8%.

- BIL owns 33,000 towers, and holds 42% stake in Indus Towers, which has 110,000 towers. BIL thus owns 80,656 towers, a 21% share of the tower industry (and a combined 143,300 and 38%).

- BIL, along with Indus, currently employ 2521 staff directly, and 5659 indirectly. Operations are spread across all 22 Telecom circles of India.

- Currently Airtel owns about 86.1% of BIL, and PE firms 13.9%, see Fig 1. But Airtel will not sell any shares in IPO. So after the issue, its stake would fall to 79.4% and the PE firms will fall to 10.5%.


Fig 1 – Bharti Infratel Structure – Source Red Herring Prospectus

Why Is BIL going for an IPO?
The objects of the issue are:
- Investments in Installation of 4,813 new towers – 1087 cr.
- Upgradation and replacement on existing towers - 1214 cr.
- Green initiatives at tower sites – 639 cr.
- General corporate purpose and partial exit by investors Temasek Holding, Goldman Sachs, Anadale and Nomura – Over 1060 cr.

Soft Benefits:
- In future Airtel can sell its shares and deleverage its stressed Balance Sheet.

- Overall valuation of Airtel will get a boost on successful listing of BIL, since it retains 79% ownership.

Telecom Industry
- The Indian telecom industry revenue reached Rs1,36,100 cr. by Mar’12, and the mobile subscriber base is around 91.9 cr. Of that number, approximately 86.8 cr. are 2G subscribers and 5.1 cr. 3G.

- The industry has gone through phases. While the 1990-’99 phase was an introduction phase, the 2000-’10 period saw massive industry and subscriber growth. We are now in a phase of hyper competition /consolidation, where operators may reduce from 12-15 to 6-8.

- The business model is based on leasing of towers by service providers on 10-15 year contracts. There is customer stickiness and the revenue model is stable.

- The total number of towers today is 376,000, and the Tower tenancy average rate for the industry is 1.7. BIL enjoys a higher tenancy of 1.9. The 1.7 - 1.8 range is considered the break-even point. Tenancies for independent telcos are estimated at around 1.46 times.


Fig 2 Industry Towers and Tenancy, Source Red Herring Prospectus

- BIL is a pioneer in the industry as it initiated co-operation and alliances in the telecom towers industry. As a result, from being a competitive scenario, industry players were able to grow tower numbers rapidly and at the same time reduce costs of this critical infrastructure by sharing.

- Airtel along with partners Vodaphone and Idea together having 68% of the mobile market by Revenue Market Share. They are also incumbents growing fastest. Thus BIL is in the safest position in the industry in the form of market share, growth prospects and revenue stability.

- The key drivers for tower and tenancy growth will be:
1) Rural 2G expansion
2) New 3G capacity
3) Usage of higher frequencies 1800MHZ+ which is more tower intensive
4) New 4G coverage

- Operating Costs structure of industry indicates that 50% of Opex is Energy, of which again 60% is Diesel costs. This is a risk as there is a good chance Diesel prices may be raised as it is subsidized.

- Companies also face several barriers in the form of the complex and time-consuming approval process for the deployment of new towers, and public fear of radiation from current towers.

- Industry players include Indus towers (109k towers), Reliance Infratel (50k), Bharti Infratel (33k), Viom Networks (42k), GTL Infra (33k), ATC (10k), Tower Vision (8k) and Ascend Telecom.

- There are significant entry barriers for new players as the business is capital & technology intensive.

BIL financials:
- We can see at a glance that financials are good. Revenues, EBITDA and PAT have increased at 23%, 31% and 57% CAGR over the last 3 years. Fig 3.


Fig 3: Bharti Infratel Financials

- The Free Cash flow of BIL has improved a lot from FY09, and turned positive in FY12. Fig 4.

- Low debt-equity ratio of 0.2 times.


Fig 4: Bharti Infratel - Free Cash Flows

Key Strengths of BIL
- Pioneering status in industry. Largest market share in a high growth industry.

- Sharp business focus on growth and maintenance of passive telecom infrastructure.

- Stable long term revenue visibility High tower tenancy at 1.9 compared to industry average of 1.7

- Low debt-equity ratio of 0.2 times, and Positive Free Cash Flows of late

Key Weaknesses/ Issues/ Challenges of BIL
- It’s a capital intensive business. As of now, BIL’s RoE was low at 5.3% in FY12.

- Diesel is key input, and prices can be raised unexpectedly.

- Industry in a financially stressed condition, due to regulatory overhang, hyper completion and stabilizing of subscriber growth. There is an ongoing consolidation in the industry.

- While market pressures have resulted in consecutive quarter-on-quarter reduction in profits for several companies including Bharti Airtel, a recent SC order on telecom licenses has forced operators to go slow on rollouts, reducing business for tower providers.

- Regulatory uncertainty: BIL’s operations may be affected if certain proposed regulatory measures with respect to tower sharing among service providers, etc. are implemented.

Strategic Thoughts around this IPO
- Telecom is a key infrastructure for a country, and the availability drives individual and corporate productivity. The benefits of mobiles are massive, and have changed our way of doing things.

- Even today India is at an early phase of telecom usage. While raw penetration numbers indicate a saturation level, the fact is that (as per TRAI data of Mar ‘12) urban wireless penetration was 162.8% while rural wireless penetration was 38.3%, indicating:
New connections growth will essentially happen in rural areas, with churn in urban areas.
Market maturity will start with urban areas, where newer data intensive apps and smartphones will drive demand and consumption of telecom services.

- Bharti Airtel is approaching the markets to list a firm after 10 years. The firm through this period has new standards of business innovation, transparency, shareholder rewards and growth.

- BIL has a unique model of passive infrastructure sharing, and cooperation among competitors.

So in my view apply at lower price band..............