Global funds buy 10% in Infratel for $1 bn
A clutch of international investors led by the Singapore government’s investment arm, Temasek, have picked up 8-10% stake in Bharti Infratel for $1 billion. The other global investors include Investment Corporation of Dubai (ICD), Goldman Sachs, Macquarie, AIF Capital, Citigroup and India Equity Partners (IEP).
The deal puts the valuation of Bharti Infratel at $10-12.5 billion. Infratel is the hived-off telecom tower arm of Bharti Airtel, the country’s largest private communications company.
ET had first reported in October that Bharti Infratel was offloading 10% stake to Temasek and other investors for $1.1 billion. Bharti Infratel owns close to 20,000 sites and holds around 42% in Indus Towers, the recently-announced joint venture between Bharti, Vodafone and Idea. The investors will indirectly hold equity stake in Indus Towers, which has over 70,000 sites.
“The enterprise valuation has been agreed to be in the range of $10-12.5 billion, and the final valuation, within this range, will be determined on the basis of Bharti Infratel’s actual operating performance in FY 2008-09,” Bharti Airtel joint MD Akhil Gupta told ET. “The exact stake being picked up by these players can only be determined after we arrive at the final valuation—it will be 7.5-10%. These investors will also get a proportional stake in Indus Towers,” Mr Gupta added.
Asked if there would be further placements in Infratel, Mr Gupta did not rule out the possibility and said: “This will depend on the board of directors of Infratel.” He also added that Bharti is still open to the possibility of listing Infratel in the future.
This placement highlights the confidence of leading global investors in the Indian telecom sector, which is now the fastest-growing telecom market in the world, and Bharti Group,” the company said in a statement. The company also said both Bharti Infratel and Indus Towers would provide passive infrastructure services to all wireless telecom operators in India on a non-discriminatory basis.
