MOSL: BHARTI AIRTEL (Buy)-Bharti announces Africa IPO price band-Surprisingly at steep discount to pre-IPO value
Bharti Airtel: Bharti announces Africa IPO price band; Surprisingly at steep discount to pre-IPO value
(BHARTI IN, Mkt Cap USD25.2b, CMP INR344, TP INR400, 16% Upside, Buy)
- Bharti Airtel (BHARTI) has set a price band of USD1.0-1.3 (GBP0.8-1.0) for its Africa business IPO. This will lead to post issue equity dilution of 16-19%, leaving BHARTI's stake at 55-57%.
- The announced price band comes as a surprise, given that it is at 15-32% discount to the pre-IPO price at an equity/enterprise value of USD4.7b/USD7.9b at the higher end of the range.
- At the FY21 EBITDA estimate of USD1.6b (10% CAGR over FY19-21), the IPO is priced at EV/EBITDA of 4.4x/4.8x at the lower/higher end of the band, much lower than our estimate of 7x.
Bharti Airtel provides telecommunication systems and services to individuals and businesses in India with operations in 20 countries across Asia and Africa. In India, Co.'s product offerings include 2G, 3G and 4G wireless services, mobile commerce, fixed line services, high speed DSL broadband, IPTV, DTH, enterprise services including national & international long distance services to carriers. In the rest of the geographies, it offers 2G, 3G wireless services and mobile commerce. Co. had nearly 287 million customers across its operations at the end of Dec 2013.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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