Investor: Temasek Holdings & others
Investment Value: $2.90 bn (cumulative)
Says, Harit Shah, Angel Broking, ”The last few years have seen the telecom infra sector acquire great potential, which is
why PE players are falling over themselves to invest in such companies. The deals are meant for multiplying money. While telecom is a capital intensive field, the investment will reap good returns. As for Bharti, it will use this amount in expanding its present network. The risk gets overshadowed as Bharti is an experienced player in the sector and is likely to use the money well. Almost all investors in this club deal are financial investors, and not strategic ones. They will be looking at creating value for the business in the next few years, as was eminently visible when share prices shot up, just after the deal took place.”
What can be bigger than a deal that peddles names like Temasek (Singapore government’s investment arm and the largest PE player in India), Goldman Sachs, Macquarie, Citigroup, India Equity Partners, Investment Corporation of Dubai, AIF Capital and India’s leading wireless company, Bharti Airtel. In December 2007, in the largest ever ‘club deal’ by PE players in India, the seven global investors bought a 9% stake in Bharti Infratel – the hived off tower arm of Bharti Airtel – for a whopping sum of $1billion, valuing the unit at a staggering $12.5 billion. While clubbing gave the PE players the benefit of risk sharing, it reduced needless competition for acquisition targets. Before this deal, in July 2007, Temasek Holdings alone had invested about $1.9 billion in Bharti Airtel (for a 4.99% stake), which ultimately made way into its tower business. Bharti Infratel owns over 20,000 telecom towers and holds about 42% stake in Indus Towers (the recent JV between Bharti, Vodafone and Idea), with over 71,000 sites. Recently, PE firm Kohlberg Kravis Roberts & Co picked up another 2-2.5% stake in the company for $250 million.
Investment Value: $2.90 bn (cumulative)
Says, Harit Shah, Angel Broking, ”The last few years have seen the telecom infra sector acquire great potential, which is
why PE players are falling over themselves to invest in such companies. The deals are meant for multiplying money. While telecom is a capital intensive field, the investment will reap good returns. As for Bharti, it will use this amount in expanding its present network. The risk gets overshadowed as Bharti is an experienced player in the sector and is likely to use the money well. Almost all investors in this club deal are financial investors, and not strategic ones. They will be looking at creating value for the business in the next few years, as was eminently visible when share prices shot up, just after the deal took place.”What can be bigger than a deal that peddles names like Temasek (Singapore government’s investment arm and the largest PE player in India), Goldman Sachs, Macquarie, Citigroup, India Equity Partners, Investment Corporation of Dubai, AIF Capital and India’s leading wireless company, Bharti Airtel. In December 2007, in the largest ever ‘club deal’ by PE players in India, the seven global investors bought a 9% stake in Bharti Infratel – the hived off tower arm of Bharti Airtel – for a whopping sum of $1billion, valuing the unit at a staggering $12.5 billion. While clubbing gave the PE players the benefit of risk sharing, it reduced needless competition for acquisition targets. Before this deal, in July 2007, Temasek Holdings alone had invested about $1.9 billion in Bharti Airtel (for a 4.99% stake), which ultimately made way into its tower business. Bharti Infratel owns over 20,000 telecom towers and holds about 42% stake in Indus Towers (the recent JV between Bharti, Vodafone and Idea), with over 71,000 sites. Recently, PE firm Kohlberg Kravis Roberts & Co picked up another 2-2.5% stake in the company for $250 million.
