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Kredent_Event Update_BWA Auctions money.umakant.info Q2 2010

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Kredent_Event Update_BWA Auctions money.umakant.info Q2 2010 Powered By Docstoc
					 Event Update

BWA Auctions
The auctions for Broadband Wireless Access (BWA) license ended today. 2.3 GHz spectrum was
auctioned for 22 circles and 11 companies were bidding for it.


No.        Circle              Category    Bid amount (Rs. Crore) Entry fee(Rs. Crore) Company 1 Company 2
   1       Delhi                  Metro           2221.02              170.7             Infotel   Qualcomm
   2       Mumbai                 Metro           2272.95              203.66            Infotel   Qualcomm
   3       Maharashtra             A              924.79                189              Infotel   Bharti Airtel
   4       Gujarat                 A              613.85               109.01            Infotel     Tikona
   5       Andhra Pradesh          A              1059.12              103.01            Infotel      Aircel
   6       Karnataka               A              1543.25              206.83            Infotel   Bharti Airtel
   7       Tamil Nadu              A              2049.45               233              Infotel      Aircel
   8       Kolkata                Metro           528.43               78.01             Infotel   Bharti Airtel
   9       Kerala                  B              258.67               40.54             Infotel   Qualcomm
   10      Punjab                  B              335.59               151.75            Infotel   Bharti Airtel
   11      Haryana                 B              118.72               21.46             Infotel   Qualcomm
   12      Uttar Pradesh (E)       B              141.09               45.25             Infotel     Tikona
   13      Uttar Pradesh (W)       B               185.7               30.55             Infotel     Tikona
   14      Rajasthan               B               97.32               32.25             Infotel     Tikona
   15      Madhya Pradesh          B              123.43               17.45             Infotel     Augere
   16      West Bengal             B               71.67                  1              Infotel      Aircel
   17      Himachal Pradesh        C               20.66                1.1              Infotel     Tikona
   18      Bihar                   C               99.28                 10              Infotel      Aircel
   19      Orissa                  C               63.63                  5              Infotel      Aircel
   20      Assam                   C               32.7                   5              Infotel      Aircel
   21      North East              C               21.06                  2              Infotel      Aircel
   22      Jammu & Kashmir         C               21.06                  3              Infotel      Aircel


         The duration of the license is 20 years.

         Services will be rolled out by year end by the service providers.

         The companies will have to pay the bid deposit within 5 calendar days of the close of the
          relevant auction and the balance amount is to be paid within 15 calendar days of close of
          relevant auction.

         The Government rose over Rs 38000 crore from the BWA auctions, including money paid by
          BSNL & MTNL for spectrum provided a year earlier. With the completion of the bidding the
          Government has completed the long pending process of the auctions.


research@kredent.com                                                          Karan Sharma (karan.s@kredent.com)
 Event Update

Winning companies
  Companies                                       Earnest Money   Total amount bid              Circles
  Aircel Limited                                       252.5             3417.97                   8
  Augere (Mauritius) Limited                           67.5              123.43                    1
  Bharti Airtel Limited                                252.5             3332.06                   4
  Idea Cellular                                        252.5                -                      -
  Infotel Broadband Services Pvt Ltd.                  252.5            12803.44                  22
  Qualcomm                                             252.5             4871.36                   4
  Reliance Wimax                                       252.5                -                      -
  Spice Internet Service Provider Limited              42.5                 -                      -
  Tata Communications Internet Services Limited        252.5                -                      -
  Tikona Digital Networks Pvt. Ltd.                   161.25             1058.62                   5
  Vodafone Essar Ltd.                                  252.5                -                      -

Infotel was the winner with all 22 circles outbidding all other companies. Bharti & Qualcomm won 4
circles while Aircel & Tikonia won 8 & 5 circles respectively. Augere (Mauritius) won a sole circle.

HFCL Infotel which won bids on all 22 circles will have to pay a total of Rs. 12803 crores
(approximately).

       -   The bid amount will put additional strain on a company which already has debt worth Rs
           1479 crores, as on 31st March 2009, on its books.

       -   Mahendra Nahata’s HFCL holds 53.36% in the company. The entire promoter shareholding
           is pledged.

       -   Other important aspect is high shareholding of financial institutions like IDBI (19.73%), OBC
           (3.75%) and LIC (1.76%)
       -   Expect to rope in a strategic partner. Rumors are RIL may be one of the suitors.
       -   We may see institutions selling their stake (total shareholding around 26%)
       -   The stock of the company was trading at Rs 10.14, hitting an upper cicuit

Bharti AIrtel won bids on 4 circles and will pay an amount close to Rs 3300 crores for 4 circles.

       -   The company had already paid Rs 12000 crore for the 3G license and completed Zain
           acquisition this week only. So the new amount will be another strain on a company which
           was debt free last year before acquisition of Zain Telecom.

       -   The stock of the company was trading at Rs 274.25 down by 3.76%


research@kredent.com                                                          Karan Sharma (karan.s@kredent.com)
 Event Update


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research@kredent.com                                                                                 Karan Sharma (karan.s@kredent.com)

				
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