Bharti Hexacom IPO Review
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BHARTI HEXACOM IPO Details: Key Facts
- Indian telecom giant Airtel’s subsidiary BHARTI HEXACOM is raising funds through Initial public offering (IPO)
- As per the Bharti Hexacom shareholding pattern, Airtel holds 70% of the shares while the government of India, through the company Telecommunications Consultants India, holds the remaining 30% of the share.
- The company filed the Draft Red Herring Prospectus (Bharati Hexacom DRHP Download) on January 19, 2024.
- The IPO consists of only OFS. The promoter Telecommunications Consultants India will raise Rs10000 crore out of this IPO by selling 10 crore equity shares.
- The total value of this IPO: Rs 4,275 Crore
- Bharti Hexacom IPO is opening on: – April 3, 2024 to April 5, 2024
- Bharti Hexacom IPO face value: Rs 5
- Crisil the credit rating agency has rated this company with a stable outlook and given an AA+/ Stable rating latest by 24th July, 2023.
- Strong growth potential for this business in India despite high competition.
- I would invest in the company during the IPO process if the valuation of the company is reasonable.
BHARTI HEXACOM DRHP filed on January 19, 2024, to float its Initial public offering. According to DRHP, this IPO consists of an offer for the sale of Up to 10 crore Equity Shares. During the offer for sale, only promoters are selling a part of their stake.
Table of Contents
BHARTI HEXACOM IPO Details
| Bharti Hexacom IPO Details | Bharti Hexacom IPO Details date, Price and other |
| Bharti Hexacom IPO date | April 3, 2024 to April 5, 2024 |
| Bharti Hexacom IPO Price band | ₹542 to ₹570 per share |
| IPO date of allotment | Monday, April 8, 2024 |
| Refunds Initiation date | Wednesday, April 10, 2024 |
| Credit of Shares to Demat Account | Wednesday, April 10, 2024 |
| Bharti Hexacom IPO date of listing | Friday, April 12, 2024 |
| Total IPO size | ₹ 4,275 Crore |
| Fresh Issue | Nil |
| Offer for Sale | 75,000,000 Equity Shares Aggregating up to ₹ 4,275Crore |
| Retail (Min lot size) | 1 lot of 26 equity shares Total investment ₹14,820 |
| Retail (Max lot size) | 13 lot of 338 equity shares Total investment ₹192,660 |
| Retail Allocation | Not more than 10% of the Net Issue |
| Bharti Hexacom share price Face Value | ₹ 5 per share |
| Bharti Hexacom share price Listing on | BSE & NSE |
| Equity Shares outstanding prior to the Offer | 500,000,000 Equity Shares |
Now the big question is – do you invest in the Bharti Hexacom IPO? Let us find out details about the company and why you should consider investing in this company.
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What is BHARTI HEXACOM LIMITED: business model Explained
Founded on April 20, 1995, Bharti Hexacom Limited is a wholly-owned subsidiary of Bharti Airtel Limited, wherein Bharti Airtel Limited holds 70% of the equity share and Government of India through its subsidiary company Telecommunication Consultants of India Limited holds 30% of the equity share capital of the Company. J S Deepak is the chairperson and Non-Executive Director of the company.
Bharti Hexacom is the largest mobile telephony service provider in Rajasthan and North Eastern regions of India. The Company also provides fixed line and broadband services in Rajasthan and North East telecommunication circles – Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura – in India.
BHARTI HEXACOM IPO Good or Bad?
Bharti Hexacom is a leading telecom company in Rajasthan and North East circles in India. The parent company Airtel is one of the leading telecom companies in India. The Telecom industry is a kind of monopolistic business in India with two major players capturing the majority of the market.
In the Rajasthan and North East Circles in India, Bharti Hexacom captures approximately 50% of the market in the North East and approximately 40% of the market share in the Rajasthan region. The company is at the number one position in the North East circle during the six months ended September 30, 2023, and Fiscals 2023 and 2022. The company has also been consistently increasing ARPU in the region.
Let us analyze the Bharti Hexacom financial breakdown
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BHARTI HEXACOM Financials breakdown
As per the DRHP filed by the company, during the six months ended September 30, 2023, and Fiscal 2023, the company had a revenue of Rs 35,579 million and Rs 67,192 million respectively. The company has reported a growth of revenue from its previous quarter and YoY basis.
| Parameters (in millions of Indian Rupee) | Ended September 30, 2023 | Ended September 30, 2022 | Ended March 31, 2023 | Ended March 31, 2022 | Ended March 31, 2021 |
|---|---|---|---|---|---|
| Revenue from operations | 34,202 | 31,670 | 65,790 | 54,052 | 46,023 |
| Profit/(Loss) for the period | 691 | 1,952 | 5,492 | 16,746 | (10,339) |
| Earnings/(Loss) per share | 1.38 | 3.90 | 10.98 | 33.49 | (20.68) |
| Total assets | 193,597 | 183,266 | 182,529 | 166,743 | 150,035 |
| Average return on Net Worth | 13.83% | 46.87% | (54.45)% | ||
| EBITDA Margin (in %) | 50.13% | 42.31% | 43.90% | 35.12% | 24.71% |
BHARTI HEXACOM Credit Rating
Since the year 2021, Bharti Hexacom has been getting a rating of CRISIL AA/ Stable for its Non-Convertible Debentures of Rs. 1500 Crores from the credit rating agency Crisil. For its commercial papers of Rs. 3500 Crores, the company is getting CRISIL A1+ which is stable and good rating. The company has been maintaining the same rating for Commercial Papers of Rs. 3500 Crores till the last rating on 24th July 2023, whereas the rating of Non-Convertible Debentures of Rs. 2000 Crores of the company has improved to CRISIL AA+/ Stable over the same period.
Objective Behind the BHARTI HEXACOM IPO
- The company will not receive any proceeds from the Offer for sale. Government of India, the promoter of the company will take the net proceeds from the OFS.
- The government of India is selling 10 crore equity shares to raise Rs10,000 crore fund out of this IPO. The complete fund will go to the government of India as one of the promoters of the company that is selling its stake in the process.
- The company will achieve the benefits of listing the Equity Shares on exchanges.
- This will also enhance the visibility and brand image of the company as well as provide a public market for Equity Shares in India.
Indian Telecom Industry forecast for Rajasthan and North East region
The India Telecom Market size is estimated at USD 48.61 billion in 2024. The telecom market in India is expected to grow at a CAGR of 9.4% during the period from 2024 to 2029 to reach USD 76.16 billion by 2029.
According to a report by IBEF, the tele density in India stood at 84.88% as of April 2022. The total broadband subscriptions increased to 788.77 million, and the overall subscriber base stood at 1.16 billion.
Considering the region where Bharti Hexacom presents, Rajasthan had a teledensity of 79.5% as of Fiscal 2023, which is behind the national average of 84.5% due to its lower rural teledensity of 57.2%. Hence, Rajasthan’s customer base is expected to grow at approximately 1.5% between Fiscals 2023 and 2028 reaching 68.5 million with a teledensity of 83%.
Wireless customers are expected to account for approximately 99% of the customers by Fiscal 2028.
Similarly, the North East circle had a teledensity of 79.7% as of Fiscal 2023 with a majority of its telecom customers being wireless due to the limited penetration of wireline services. The challenges of wireline services are in laying and maintaining wireline infrastructure given the region’s hilly terrain and extreme weather conditions.
The Government is paying special attention to the region towards infrastructure development. The government is implementing various schemes including a 4G saturation project for the provision of 4G mobile services across all 24,680 uncovered villages of India, including in the North East.
Owing to these factors, the customer base in the North East is also expected to grow at 1.5% between Fiscals 2023 and 2028 reaching 13.5 million with a teledensity of 82%. Wireless customers are expected to account for approximately 98% of the customers as of Fiscal 2028.
Bharti Hexacom Competitors
Players such as Reliance Jio, and BSNL are the major competitors of the company. The telecom industry is capital-intensive and highly competitive. The entry barrier in the industry is quite high. Hence, major players prefer to acquire smaller players in the industry to scale up their operations.
The company also faces competition from public Wi-Fi providers and providers of new telecommunication services such as internet-based service providers, such as Google Voice, WhatsApp, Skype, Zoom, Microsoft Teams, and WebEx.
BHARTI HEXACOM IPO review: Do you invest?
- The company is one of the fastest-growing telecom companies in the region.
- Strong parentage – Airtel owns 70% of equity share capital.
- Airtel is a global communications solutions provider with over 500 million customers in 17 countries across South Asia and Africa.
- The region is expected to grow better in comparison to the rest of India in terms of telecom penetration.
- Bharti Hexacom has been reporting revenue growth over the last three years reported.
- The telecom industry as a whole in India is under-penetrated compared to developed countries.
- The Rajasthan and North East regions are further under-penetrated compared to rest of the India.
- There is strong potential for growth for this company in the region.
- Considering the above factors BHARTI HEXACOM is a strong company to invest in.
- I would like to invest in its IPO both for listing gain and long-term investment.
Bharti Hexacom IPO GMP
| Bharti Hexacom IPO GMP | IPO Price | GMP | Estimated Listing Price |
|---|---|---|---|
| 27-03-2024 | ₹ 570 | ₹ 40 | ₹ 610 |
| 26-03-2024 | ₹ 570 | -₹30 | ₹ 540 |
| ₹ | ₹ | ₹ – |
Frequently Asked Questions
BHARTI HEXACOM Filed DRHP?
Yes, here is the BHARTI HEXACOM IPO on January 19, 2024, to float its Initial public offering consisting of OFS.
Is BHARTI HEXACOM a government-owned company?
No, it is not a government-owned company. The government owns 30% shareholdings. In this IPO government is selling its stakes.
Who are the shareholders of Bharti Hexacom?
The promoters of Bharti Hexacom are
1. Airtel holds 70% of the total equity capital share;
2. Government of India holds 30%;
Where is Bharti Hexacom HQ?
REGISTERED OFFICE AND CORPORATE OFFICE
Bharti Crescent, 1, Nelson Mandela Road, Vasant Kunj, Phase II, New Delhi 110 070, India
Telephone: 011-46666100
Email: bhartihexacom@bharti.in
How can I invest in BHARTI HEXACOM’s IPO?
If you are interested in investing in BHARTI HEXACOM’s IPO, you will need to open a demat account and trading account with a broker. You can then apply for shares during the book-building process.
When is the Bharti Hexacom IPO launch date?
The BHARTI HEXACOM IPO date has not yet been announced. However, it may be open for subscription in April 2024.
What is the BHARTI HEXACOM IPO Price?
The BHARTI HEXACOM IPO Price has not yet been announced
What are the risks of investing in BHARTI HEXACOM IPO?
As with any investment, there are risks associated with investing in BHARTI HEXACOM’s IPO. These risks include:
1. The price of the shares may fall after the IPO.
2. The company may not perform as well as expected.
3. The company may face regulatory or legal challenges.
What is Bharti Hexacom IPO GMP?
Bharti Hexacom IPO GMP is ₹ 40 on 27-03-2024. The Bharti Hexacom IPO share price is expected to list on premium.
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