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Bharti Tele prices IPO at Rs 45

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(From left) Mr Sunil Bharti Mittal, Chairman, Bharti Televentures, Mr Sin Hong Boon, Director, and Mr Nimesh Kampani, Chairman, JM Morgan Stanley, at a news conference in Mumbai on Wednesday.

MUMBAI, Jan. 23

BHARTI Televentures Ltd on Wednesday announced a floor price of Rs 45 per share for its initial public offering which opens on January 28.

This was lower than the last price at which private equity placements were made, Mr Sunil Bharti Mittal, Chairman and Group Managing Director, Bharti Tele-Ventures, said.

The company did private equity placements aggregating $481 million in May 2001, with Warburg Pincus, SingTel, Asian Infrastructure Fund and IFC. Taking into account foreign exchange rates and other variables, the placements were at around Rs 53 per share, said Bharti officials.

The floor price elicited mixed response from analysts some of whom expected the company to pitch it higher, at around Rs 50 plus.

Others felt it should have been fixed at Rs 30 to Rs 35, and that Rs 45 was high "relative to current valuations of companies in China and Asia and elsewhere."

The IPO will be a 100-per cent book building offer, the first such in the country; and the first by a major telecommunications company. The issue closes on February 2. The company would be listed on Bombay, Delhi and National Stock Exchanges.

The offer is for 18.53 crore equity shares, of which a minimum of 60 per cent would have to be subscribed by qualified institutional buyers (QIBs) - foreign institutions, domestic financial institutions and the like.

Mr Mittal said out of the 10 per cent equity stake being offered by the company through this IPO, FIIs could take up to 73 per cent of the issue without exceeding their permitted holding limits.

Fifteen per cent of the issue has been set aside for non-institutional investors such as high networth individuals and corporates and 25 per cent for the retail sector.

For the half year ended September 30, 2001, the company showed revenues of Rs 625 crore, EBIDTA of Rs 168 crore and profit before tax of Rs 18 crore.

Bharti Televentures is a holding company, with four fully owned subsidiaries in four different telecom service sectors; with 85 per cent of business currently coming from cellular services.

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