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BHARATI TELECOM Unlisted Shares

BHARATI TELECOM Unlisted Shares

Bharti Telecom manufactures push button telephones, cordless telephones, and fax machines. The company was founded in 1984 and is based in New Delhi, India. Bharti Telecom operates as a subsidiary of Bharti Enterprises. Bharti Telecom recently raised its stake in Bharti Airtel to over 50% through open market purchases.

Value
Offer price to minority shareholders (Rs/share) 163.25
DDT (Rs) 33.55
Effective price per share (Rs) 196.80
Total shares of Bharti Telecom (cr) 261.07
Illiquidity discount (%) 25%
Equity Value of Bharti Telecom (in Rs cr) 68,497
Net debt of Bharti Telecom (in Rs cr) 5,251
Implied value of holdings of Bharti Airtel (in Rs cr) 73,747
Total shares held in Bharti Airtel (cr) 200.27
Implied share price for Bharti Airtel (Rs) 368

In our view, the exit price of Rs163.25 per share (which together with the dividend distribution tax of Rs33.55 per share payable by the company on account of capital reduction amounts to Rs196.80 per share) is reasonable. If the minority shareholders would have sold the BTL shares in a bilateral trade, the same would have been subject to capital gain taxes.

The total outlay for BTL for this capital reduction is Rs560cr for a total of 2.84cr shares (1.09% of the total shares).

Bharti Airtel is in the Telecommunications – Service sector. The current market capitalisation stands at Rs 132,333.93 crore.

The company management includes Sunil Bharti Mittal – Chairman, Gopal Vittal – Managing Director & CEO, Chua Sock Koong – Non Executive Director, Rakesh Bharti Mittal – Non Executive Director, Tan Yong Choo – Non Executive Director, Manish Kejriwal – Independent Director, Shishir Priyadarshi – Independent Director, D K Mittal – Independent Director, Ben Verwaayen .

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