Warburg's Bharti deal: Rs 2,411 cr

In perhaps the largest-ever block deal executed on the Indian bourses, private equity investor Warburg Pincus on Monday sold another 6.05 per cent equity in Bharti Tele-Ventures to a host of foreign institutional investors.

The deal was executed on the Bombay Stock Exchange in the first 30 minutes of trading in two tranches. With 112 million shares traded in this block deal at Rs 218 per share, the transaction is valued at around Rs 2,411.6 crore (Rs 24.11 billion).

In a media statement, Bharti Tele said: "This is perhaps the biggest block deal in the history of the Indian equity markets. This transaction acknowledges the leadership position that Bharti enjoys in the telecom industry, not just in India but across the world."

"The size of this transaction further reinforces the emerging strength and depth of the Indian equity markets on the one hand and the optimistic and positive interest in the Indian telecom sector and Bharti's leadership position on the other," the release added.

"Our sale of $560 million in Bharti Tele-Ventures stock is a continued validation of the growing depth and maturity of the Indian equity markets," said Charles R Kaye, co-president of Warburg Pincus, adding: "Bharti has become a leading provider of telecommunications services with a customer base in excess of 11 million and market capitalisation exceeding $10 billion. Bharti is a compelling growth story and the company continues to attract interest from investors around the world."

According to information available from the Bombay Stock Exchange website, a Warburg fund, Brentwood Investment Holdings, sold 112 million shares at Rs 218 per share. The Growth Fund of America bought 20 million shares while the Euro Pacific Growth Fund bought 59.3 million shares.

The identity of the buyers who picked up the remaining shares was not available. Market sources said UBS Securities brokered the deal, but no independent confirmation of this was available.

Following the huge block deal, the stock's price spurted intra- day to its high of Rs 234, but slipped to close at Rs 222.15, down 1.46 per cent from its previous close. Dealing room sources said the counter came under selling pressure as the block deal was executed below Friday's closing price of Rs 225.45.

Further, the Reserve Bank of India has announced that FII holdings in the company have already reached the 48 per cent limit and no further buying by FIIs will be permitted.

This is the second time in less than two months that Warbug Pincus has sold a large chunk of Bharti Tele shares in a block deal. On February 2, 2005, Warburg had sold shares worth Rs 1,350 crore (Rs13.5 billion) to a consortium of foreign investors.