Case Study Of Bharti Infratel

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The figure below illustrated that Bharti Infratel is the second largest IPO in India in the last five years, after Coal India. (Quartz Media USA, 2015) Initial Public Offering Details: Deal Dates: Announcement/Filing Date: 14 September 2012 Book Building Period: 11 to 14 December 2012 Pricing Date: 17 December 2012 Listing Date: 28 December 2012 IPO Grade: Grade: 4 Rating Agency: CRISIL, IPO Grade Date: 27 November 2012 This grade indicates that the fundamentals of the IPO are above average relative to the other listed equity securities in India. (CRISIL, 2012) Overview: Offer Price: INR 210 Total Value: INR 39669 Million Subscription Ratio: 1.27 Retail Subscription Ratio: 0.0706; Institutional Sub Ratio: 2.84 Shares from Issuer (Primary): 146.234 Million - 77.41 %…show more content…
Source: (Deloitte Touche Tohmatsu India Private Limited, 2015) With new players like Reliance Jio entering, the industry is like to see some radical change in market share of its players. Bharti Infratel’s revenue base will depend on the performance of these telecom operators. Conclusion: We find that the Bharti Infratel IPO was a fairly successful IPO. The timing of the IPO was slightly early and the company could raise more funds in early 2013. This has been compensated by Bharti Infratel’s additional capital raising activities. Fair price of the IPO ranged between INR 232 and INR 268 based on our valuation. The IPO was subscribed at INR 210 due to tepid response among retail investors. Overall the IPO was oversubscribed 1.3 times and has generated handsome returns for its shareholders since list date. The company has outperformed other companies which were listed during the time. Bharti Infratel has maintained steady growth since the IPO with its EBIT growing at a 5 year CAGR of 20% and top line growth at par with industry. RoE and RoCE have improved to 13% and 21% respectively showing a phenomenal improvement in operational
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