Shares of Bharti Infratel, which raised over Rs. 4,118 crore in the biggest initial public offering (IPO) in two years, fell 13% as it listed on the stock exchanges on Friday. A cautious outlook for mobile tower operators and high price were the main reason for the fall, said analysts.
After falling over 14% during the day, shares of the company finally ended at Rs. 191, down 13% from its issue price of Rs. 220 per share on the Bombay Stock Exchange (BSE). The stock settled 13.2% lower at Rs. 191 on the National Stock Exchange.
While the company had fixed the issue price at Rs. 220 per share for institutional investors, it gave a discounted price of R210 for retail investors.
"The IPO price was probably too high and the return on investment is not very attractive," said Deven Choksey, managing director at KR Choksey Shares & Securities.
The IPO of the Sunil Bharti Mittal led-company was subscribed 1.3 times. The issue was open from December 11-14 and was the largest since Coal India raised about Rs. 15,500 crore in October 2010.
The telecom tower company currently has a market value of Rs. 36,110 crore. Bharti Infratel has about 34,000 towers and owns 42% of Indus Towers, the world's largest tower operator. The Indus-Bharti combination has a 38% share of the Indian telecom tower market.