As an ex-shareholder of Bharti Group of Companies, I was never satisfied by the companies performance and that too not even with the management policies and decisions.
Transparency level of Bharti Group of Companies was not satisfactory. The companies performance wouldn’t be even upto average as said by the analysts. The management wasn’t able to achieve its set targets. Either they would have booked loss or even if profit had been booked that profit wouldn’t be distributed among shareholders. Dividend pay-out was not in accordance to the industry average. In all its new ventures they break-even very lately showing less business then expected. Neither the analyst nor the shareholders were satisfied by the level of transparency maintained in the annual report.
MARKS GIVEN OUT OF 10*:- to Bharti Group of Companies
1) For Transparency Level : 05
2) For Earning Per Share : 02
3) For Profit Ratio : 03
4) For Turnover Ratio : 06
In accordance to industry average.
Bharti Group Of Companies new venture Bharti Televentures Ltd. is coming up with a public issue on 28.01.2001. The issue is for 18, 53, 36, 700 shares with a face value of Rs. 10/- each. The premium is not yet decided because they are going to raise funds through Book Building Process and for that they have kept a Floor Price of Rs. 45/- per share which I feel is in itself the highest. Not going in for further technicalities the per share purchase price at the start of bid is Rs. 45/- i.e. Rs. 10/- face value and Rs. 35/- premium. Looking at the past performances of ’’Bharti’’, I feel that the price in itself is high. Further, they haven’t mentioned in their prospectus that when are they expecting to break-even. Now let’s have a look at the business in which ’’Bharti’’ has entered. The telecommunication sector is right now facing stiff competition. Since the start of telecommunication industry in India we have two telecommunication giants backed by government one is ’MTNL’ and the other is ’BSNL’. The private sector companies involved in this business are:
1) The Reliance Group,
2) The group of Birla, Tata, AT&T and BPL popularly known
as ’BATATA’, and
3) The Fascel Group
So, Bharti Televentures is going to face and are facing a stiff competition from many companies as mentioned above.
Now, a small example for the fees it had to pay the government. Whole of India has been dividend into some 15 to 18 odd areas. All these companies were required to bid for the areas as many as they want. The starting bid amount for a single area was Rs. 10/- crores and ’’Bharti’’ has bade for some 8 odd areas.
Benefit of Doubt: Singapore Telecom is a business partner of Bharti Group of Companies. So, one can hope for the required amount of professionalism from Bharti Televentures Ltd. Further, the company can get the benefit of experience of Singapore Telecom.