Bharti Infratel shares drop 13 per cent on market debut

Bharti Infratel, backed by billionaire Sunil Mittal, dived 13 per cent in its trading debut after raising about $760 million in India's biggest IPO in two years, weighed down by a cautious outlook for mobile tower operators.

The IPO, priced near the lower end of an indicative range to ensure success, struggled to find interest from retail investors and was supported mostly by overseas institutional buyers, a key pillar in the Indian stock market. Bharti Infratel's poor trading debut is unlikely to deter future offerings in India, bankers said, with strong foreign fund bids expected to underpin the share market.

"It's early days and the stock should settle in the course of the next day or two. If the foreign flows continue, the market will remain buoyant which should translate into more deals," a source familiar with the matter said. "If not IPOs, there should be more follow-on offerings."

Bharti Infratel's listing follows a tepid first half in IPO deals, and is the biggest after state-run Coal India's $3.5 billion issue in 2010.

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