After sailing through on Day 2, the initial public offer (IPO) of Bharti Hexacom was subscribed nearly 30 times on the third and final day of bidding process.

The category reserved for institutional investors was booked the most at 48 times, followed by non institutional investors at 10 times and retail investors at 2.82 times.

Ahead of the issue launch, the company has garnered just over Rs 1,900 crore in the anchor round.

Marquee anchor investors, who participated in the anchor book include Capital Group, Fidelity Funds, ADIA, Morgan Stanley among others.

Bharti Hexacom’s IPO is completely an offer-for-sale (OFS), without any fresh equity issue. Telecommunications Consultants India, the sole public shareholder in the company, will offload 7.5 crore equity shares or a 15% stake in the OFS.

Sunil Mittal-driven telco Bharti Airtel holds a 70% stake or 35 crore shares and the remaining 30% shareholding, equivalent to 15 crore equity shares is held by non-promoter TCIL.

Bharti Hexacom IPO review

Analysts advised investors to subscribe to the Rs 4,275 crore issue as the company has strong parentage and an established brand along with a presence in markets with high growth potential

“Considering the FY24-annualized EPS of Rs 7.52 on a post-issue basis, the company will list at a P/E of 75.80 times with a market cap of Rs 28,500 crore, whereas its peer Bharti Airtel is trading at a P/E of 63.3 times. We assign a ‘subscribe’ rating to this IPO as is available at a reasonable valuation as compared to its peers,” said Marwadi Financial Services.

Bharti Hexacom IPO price band

The IPO, which closes on April 5, is priced in the range of Rs 542-570 per share and investors can bid for 26 shares in one lot.
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Bharti Hexacom IPO GMP

Ahead of the issue launch, the company’s shares traded with a premium of Rs 60 in the unlisted market.

Other details

Bharti Hexacom is a communications solutions provider offering consumer mobile services,fixed-line telephone, and broadband services to customers in the Rajasthan and the North East telecommunication circles in India, which comprises the states of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland and Tripura. The company offers its services under the brand ‘Airtel’.

For the six months ended September, Bharti Hexacom reported a revenue of Rs 3,420 crore, compared to Rs 3,167 crore a year ago. However, profit dropped to Rs 69 crore from Rs 195 crore a year ago.

The company’s topline has grown at a CAGR of 19.51% between FY21-23.

From an average revenue per user (ARPU) of Rs 135 in FY21, Bharti Hexacom has managed to improve this to Rs 195 during the six months ended September 2023. As of September 2023, the company had an aggregate of 29.1 million customers across both circles.

SBI Capital Markets, Axis Capital, BOB Capital Markets, ICICI Securities, and IIFL Securities are the book-running lead managers to the issue.

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