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Saturday, March 04, 2006

Hutch IPO in Q2FY07 may be priced at Rs 800

Hutchison Essar Ltd may price its IPO slated in Q2FY07, at around Rs 800 per share and that would give the company a market cap of Rs 54,000 crore on listing. The company is planning to divest 10% ofits equity capital of Rs 340 crore according to Sumeet Rohra of Antique Stock Broking.

Hutchison Essar Ltd may price its IPO, slated in Q2FY07, at around Rs 800 per share and that would give the company a market cap of Rs 54,000 crore on listing. The company is planning to divest 10% of its equity capital of Rs 340 crore according to Sumeet Rohra of Antique Stock Broking.

Hutchison Essar is planning to come out with an IPO sometime in the second half of the next fiscal according to newspaper reports. The company is planning to divest 10% of its equity at an estimated price of Rs 800, which would give the company a market capitalization of Rs 53,000-54,000 crore according to market sources.

The company was in news recently as the Kotak Mahindra Bank sold 8.33% stake back to Analjit Singh of Max India at a whopping Rs 1,019 crore. Singh had apparently sold 5% of his holding in Hutchison to the Essar Group in the month of October at Rs 603 per share.

Hutch has a subscriber base of 1.3 crore against Bharti’s 1.75 crore. On a comparative basis Bharti’s enterprise value is pegged at USD 12.6 billion vis-à-vis USD 6.5 billion for Hutch.

According to Rohra, the company could possibly price its IUPO in the range of Rs 800 per share and could turn out to be the biggest blockbuster stories in the telecom sector in the years to come.

Recent newspaper reports have put India ahead of China in terms of mobile subscribers added per month. Compared to China’s 5 million new subscribers last month, India has added 5.3 million new subscribers and that augurs well for the future of Indian telecom, Rohra said.

The Hutch stake sale by Kotak Mahindra gives the company a rough valuation figure of USD 6 billion. Hutch Essar has an equity capital of Rs 340 crore and a divestment of 10% stake at around Rs 800 per share can catapult Hutch Essar in the market league of Bharti Televentures with a market cap of Rs 54,000 crore on listing. Bharti’s market cap (at today’s price) is around Rs 77000 crore.

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