Our Bureau

Mumbai , March 14

PRIVATE equity investor Warburg Pincus today sold over 6 per cent equity stake in Bharti Tele-Ventures for $560 million (nearly Rs 2,500 crore) in the largest equity deals ever in a single scrip on any Indian stock exchange.

Warburg sold 11.2 crore shares of Bharti Tele-Ventures (BTVL) today at Rs 218 per share on BSE.

Bulk deal records of the BSE showed that 2 crore of the shares sold today were bought by The Growth Fund of America and 5.93 crore shares by Euro Pacific Growth Fund, both of which fall under the Capital International group of the US.

The buyer for the rest of the shares (over 3 crore) was not specified, but sources at BTVL said they were Fidelity International and Government of Singapore.

This is the third bulk sale of BTVL shares by Warburg in the last 12 months. Last month, it sold 3 per cent stake in BTVL for Rs 1,355 crore, at Rs 217 per share. Before that Warburg had sold over 3 per cent stake for over Rs 800 crore in August 2004.

According to analysts Warburg has made a four-to-five-fold profit on its original investments in BTVL.

The size of today's transaction further reinforces the emerging strength and depth of the Indian equity markets on the one hand and the interest in the Indian telecom sector and Bharti's leadership position on the other, said a spokesperson for BTVL.

Telecom analysts did not contest this. "The maturity of the market is in evidence from the nature of the buyers," said one of them. "Private equity which usually comes in at earlier stages, has not only made a bumper profit and exited, but has been replaced by foreign institutional buyers who represent a broader base of investors."

Part of the reason for today's sale could also be the number of telecom IPOs that are tentatively scheduled for this year, the candidates being IDEA Cellular and Hutch, which would mean competition for existing listed telecom scrips, said analysts.

"Our sale of $560 million in BTVL stock is a continued validation of the growing depth and maturity of the Indian equity markets," said Mr Charles R Kaye, Co-president, Warburg Pincus. "We continue to work with Bharti and are supportive of our participation in Bharti's previously announced ADR offering." (BTVL has announced its intention to make an ADR offering sometime down the line)

Warburg still holds 10.81 crore of BTVL shares, a position that represents 5.8 per cent of the company. Before the first sale in August 2004, Warburg held over 18 per cent of Bharti's shares.

Soon after the announcement of this deal, the Reserve Bank of India said that FIIs and NRIs will need to take permission to invest in equity shares of BTVL as their investments had reached the trigger limit of 48 per cent.

Although the regulations permit 74 per cent FDI in telecom, prior permission is required for acquisitions once the trigger-limit has been crossed.

On account of this, possibly, Bharti shares today ended 1.2 per cent lower, at Rs 222.6 on the BSE.

BTVL shares have grown four-fold on the stock exchanges since its listing in early 2002.

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