Emkay -Bharti Infratel IPO Note; Subscribe at lower band; Price band: Rs210-240

[Rajesh Desai]

IPO Note (December 07, 2012)

IPO Note   Bharti Infratel Price band: Rs 210-240 Subscribe at lower band ·      Bharti Infratel has tower market share of 40% with 80,656 towers. Tenancy growth of 8% CAGR over FY09-12 resulted in revenue /EBITDA /PAT CAGR of 23%/33%/57% ·      Near term outlook not encouraging due to over supply in the tower industry & slowing revenue growth for telecom service providers. Growth in data to drive tenancies in the long-run ·      Valuations - EV/EBITDA at 11.9x/10.4x on H1FY13 annualized basis. Implied EV/tower is Rs5.6mn/Rs5.0mn and EV/tenant at Rs2.9/2.6mn on higher/lower price band ·      Recommend subscribe at lower price band of Rs210, which is justified, as historically tower deals have been valued in the range of Rs4.6mn to Rs5mn EV/Tower   Click here to read report: IPO Note

 

 

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CA. Rajesh Desai