The government has valued the 30 per cent stake of state-run Telecommunications Consultants India Limited (TCIL) in Bharti Hexacom at around Rs 89 billion, based on a formula suggested by SBI Capital Markets. However, the final value that the government would raise will be dependent on the time of exit from the joint venture (JV) and market cap of Bharti Airtel.
Bharti Hexacom provides telecom services in Rajasthan and Northeast. The company is jointly owned by Bharti Airtel (70 per cent) and government through TCIL (30 per cent). For over 15 years the proposal for TCIL selling its stake and exiting the joint venture has been pending. Further, Airtel has the first right of refusal for TCIL’s stake.
Meanwhile, the government will decide on the time for exit after the Department of Investment and Public Asset Management (DIPAM) approves the proposal.
Earlier, in 2006, Airtel had offered Rs 2.62 billion for the 30 per cent stake, which was turned down by the then government. Thereafter the operator had asked TCIL for revaluation. Further, in 2011, Deloitte suggested a valuation of Rs 18 billion but the then cabinet secretary asked the telecom ministry to re-evaluate it.
