Bharti Airtel to sell major chunk of tower arm Infratel

Shares of Bharti Infratel fell nearly 5 per cent to Rs354 this morning after news that its parent company Bharti Airtel Ltd is seeking to sell 5.5 crore shares in its mobile tower arm to qualified institutional buyers.

Bharti Airtel has opened a qualified institutional placement (QIP) to sell the shares with an option to sell an additional 1.75 crore.

As of 31 December Bharti Airtel had a 74.85-per cent stake in Bharti Infratel, which will reduce after the stake sale. Share sale by promoters is usually viewed negatively by investors.

According to NDTV, sources said that base book of the offer was subscribed overnight and most of the shares were purchased by foreign institutional investors, as investment bankers are looking for an additional green shoe option.

This option gives the promoter the choice to sell additional equity in case the base issue gets oversubscribed.

Another report says Bharti Infratel shares will be sold in an indicative price band of Rs350-360 a share, a discount of as much as 6 per cent from its Wednesday's closing price of Rs372.30.

The size of the offering is $315 million, with an option to raise it by another $100 million.

Bharti Airtel, headed by billionaire Sunil Mittal and around one-third owned by Singapore Telecommunications, had a net debt of nearly $11 billion as of December-end.