NEW DELHI: Bharti Infratel dropped 2 per cent on Wednesday following the announcement of its merger with Indus Towers.
The merged entity will see Bharti Airtel and Vodafone each holding around 33 per cent. Kumar Mangalam Birla-led Idea Cellular and private equity fund Providence, which jointly hold 16 per cent in Indus Towers, will exit through a cash payout. The merged entity will change its name to Indus Towers Limited and stay listed on stock exchanges.
The merger ratio i.e. 1,565 shares of Bharti Infratel for every 1 Indus Towers share values the latter at an enterprise value of Rs 71,500 crore ($10.8 billion) or 9.3 times EV/Ebitda on trailing 12-month basis.
Following the announcement, the stock fell 1.51 per cent to hit a low of Rs 324.35.
The combined valuation of the company could be as high as $16 billion, according to investment banking sources, but this could not be independently verified. It may pave the way for a potentially larger investment by private equity players in future, ET reported.