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Bharti Infratel Seeks $831 Million in Initial Share Sale

Billionaire Sunil Mittal
Indian billionaire Sunil Mittal seeks funds to expand his mobile-phone tower business. Photographer: Chris Ratcliffe/Bloomberg

Bharti Infratel Ltd. will raise as much as 45.3 billion rupees ($831 million) in India’s biggest initial public offering in two years as billionaire Sunil Mittal seeks funds to expand his mobile-phone tower business.

The unit of India’s largest wireless operator will offer shares at 210 rupees to 240 rupees apiece, according to a term sheet obtained by Bloomberg News. Bharti Infratel’s offering consists of 146.2 million new shares and 42.7 million existing ones, the terms show.

The share sale, the largest since state-owned Coal India Ltd.’s $3.5 billion sale in October 2010, marks the revival of the IPO market after India’s benchmark Sensex index increased 24 percent to a 19-month high. Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co. are forecasting a positive outlook for Indian equities for 2013. Initial share sales in India tumbled 77 percent to 14 billion rupees this year, according to data compiled by Bloomberg.

The Sensex’s gains, driven by foreign flows and policy measures, have made it the second-best performer this year among benchmark measures with at least $1 trillion in value, data compiled by Bloomberg show. India’s S&P CNX Nifty Index may climb about 13 percent by the end of next year, Goldman Sachs, said in a report yesterday.

The IPO of the unit of Bharti Airtel Ltd. will provide an exit for companies such as Temasek Holdings Pte, Goldman Sachs and Citigroup Inc., which bought a $1 billion stake in 2007. Other Bharti Infratel investors include KKR & Co., the leveraged-buyout firm led by Henry Kravis and George Roberts, which agreed in February 2008 to invest $250 million in a deal that valued the company at $12.5 billion.

Bharti Airtel, which has more mobile-phone users than the population of Japan, fell 0.4 percent to 329.2 rupees at 11:24 a.m. in Mumbai. The shares have dropped 5 percent this year.

Bidding Dates

Investors will be able to bid from Dec. 11 to Dec. 14, according to the terms. Bharti Infratel owns more than 34,000 telecommunications towers in 11 of India’s 22 operation zones. The company has a 42 percent stake in Indus Towers Ltd., the world’s largest tower company.

Bharti Infratel will use 10.9 billion rupees for adding 4,813 towers, according to the company’s prospectus. It will use 12.1 billion rupees to upgrade and replace existing towers.

“Operators’ spending indicates demand for towers is going to increase,” Akhil Gupta, managing director of Bharti Infratel, said in New Delhi today. “The sale comes on the heel of anticipated surge in data traffic.”

Bharti has hired Standard Chartered Plc, JPMorgan, Barclays Plc, Bank of America Merrill Lynch, Enam Securities Pvt., HSBC Holdings Plc, Kotak Mahindra Capital Co., Deutsche Bank AG and UBS AG for the tower unit sale.

Mittal, 55, is India’s eighth-richest man with a net worth of $7 billion, according to the Bloomberg Billionaires Index.

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