Bharti Infratel's Rs4,500-cr IPO fully subscribed

The Rs4,500-crore initial public offer (IPO) of Bharti Infratel Ltd, the tower arm of telecom service provider Bharti Airtel, was fully subscribed on Thursday as the share sale entered the third day, lending credence to a recovery in the market.

By 3.20 pm, the Bharti Infratel offer was subscribed 120 per cent of the number of shares on offer, stock exchange data showed.

Institutional investors had bid for 2.8 times the number of shares reserved for them while the portion for individual investors was undersubscribed, mainly due to the high valuation of the sock and the minimum bid lot of 50 shares, analysts said.

Bharti Infratel and four of its equity investors together are selling a total 188.9 million shares, or about 10 per cent of the company's equity at a price band Rs210 to Rs240 apiece.

The mop-up, coming amidst a bunching of share sales in the market, with the government also in the fray for divestment of stake in public sector enterprises, is expected to encourage more firms to tap the market in the coming financial year starting April 2013.

Bharti Infratel is planning to add over 1,000 telecom towers amidst increasing data usage at the 2G sites, especially in smaller cities along with the roll-out of 3G/ 4G network. The telecom tower rental business accounts for a near 40 per cent share of the Bharti group's telecom business and generates good cash flows.

The Bharti Infratel share sale is the last of a busy market schedule involving sale of stocks worth more than $2 billion during the week ending Friday.