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Bharti Infratel will use proceeds from its initial stake sale to set up 4,813 new towers and upgrade its existing telecom towers.
The company, a subsidiary of the country’s largest telecom operator (by subscribers) Bharti Airtel, had filed the early papers for an initial public offering (IPO) last week.
It has proposed to use about Rs 1,086.56 crore for setting up 4,813 towers across seven circles. The new towers will be set up in the financial years 2014, 2015 and 2016, according to the draft red herring prospectus filed with the regulator. The new towers would be a combination of ground-based towers and rooftop towers, it said in the prospectus. The company also proposes to deploy about Rs 1,214.08 crore of the net proceeds for upgrade and replacement of existing towers. This is to enhance capacity for additional sharing of towers.
However, the company will not use the net proceeds to procure second-hand equipment.
As of June 30, the company owned and operated 33,446 towers across 11 circles. Bharti Airtel, which holds about 86 per cent stake in infrastructure firm Bharti Infratel, will not sell any shares through the issue. Bharti Infratel, according to reports, was looking at raising about Rs 5,000 crore.
The IPO will constitute a new issue of equity shares by Bharti Infratel and offloading of stake by four investors.
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