Indian group Bharti Airtel's mobile phone tower unit has filed for an initial public offering which sources said on Friday could raise nearly $1 billion in the country's biggest IPO in more than two years.

Bharti Infratel is likely to launch the IPO in January and is offering a 10 percent stake, according to sources who declined to be named as the information is not public yet.

Bharti Airtel, which owns 86 percent of the Bharti Infratel unit, said it had decided not to sell any shares in the public offering.

Bharti Infratel will issue new shares, and four other investors including investment arms of Singapore state investor Temasek and Goldman Sachs will sell shares in the IPO, it said.

A Bharti spokesman declined to comment beyond the statement.

Three quarters of the shares on offer in the IPO would be new shares issued by Bharti Infratel, said one of the sources, adding that much of the IPO proceeds would be invested for future capital expenditure requirements.

Private equity investors, who own a combined 13 percent stake in Bharti Infratel, also include Kohlberg Kravis Roberts & Co, Macquarie Group, Citigroup, Investment Corporation of Dubai and AIF Capital.

Their individual stakes are not known. Bharti said in the statement Compassvale Investments, which is an arm of Temasek, GS Strategic Investments, Anadale Ltd and Nomura Asia Investment (IB) Pte. Ltd would participate in the IPO.

Shares in Bharti Airtel closed 0.6 percent higher at 255.10 rupees, while the benchmark index rose 2.5 percent.

IPO MARKET

Bharti Infratel's IPO would be the biggest since state-run Coal India raised $3.5 billion in an initial public offering in 2010.

Indian companies raised $7.1 billion from share offerings in the first half of this year, down 4 percent from the same period in 2011, according to Thomson Reuters data. Many companies have put off their share sale plans this year due to subdued markets.

Bharti Infratel, which has more than 33,000 mobile phone masts, also holds a 42 percent stake in joint venture Indus Towers, which is the world's biggest telecoms tower company, with about 110,000 towers.

Tower companies get their revenue from leasing infrastructure to network operators but they are going through a tough time in India as a Supreme Court order to revoke the regional licences of eight mobile phone companies in the 15-player market has weighed on demand.

Bharti has mandated eight banks for managing the IPO, with Standard Chartered as its lead banker, sources said.

Other banks managing the share sale are Barclays, JPMorgan, Bank of America Merrill Lynch, HSBC , UBS, and India's Kotak Mahindra and Enam Securities.

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