Bharti Airtel arm Bharti Hexacom gets SEBI approval to raise funds via IPO

Bharti Hexacom, a wholly owned subsidiary of telecom major Bharti Airtel, has received final approval from the Securities and Exchange Board of India (SEBI) to launch its initial public offerings (IPO). The public issue is completely an offer for sale (OFS) and there is no fresh issue component, which means entire IPO proceeds will go to the selling shareholder. The company, which is into telecommunication business in Rajasthan and North East Circle, is yet to announce the price band and issue size of the IPO.  

The company had filed its draft red herring prospectus (DRHP) with the capital market regulator SEBI in January this year, while it received an observation letter on March 11. This is going to be the first IPO from the Bharti Group after a long gap of 12 years since the listing of Bharti Infratel in 2012.

Bharti Hexacom looks to raise the fund through OFS of up to 10 crore equity shares with a face value of ₹5 each by the only public shareholder Telecommunications Consultants India.

Currently, Bharti Airtel holds a 70% stake (or 35 crore equity shares)  in Bharti Hexacom, while the Government of India through Telecommunication Consultants of India Limited owns the remaining 30%, or 15 crore, equity shares in the mobile telephony services company.

Incorporated on April 20, 1995, Bharti Hexacom is the largest mobile telephony services in Rajasthan and North Eastern circles in India, which comprises the states of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland and Tripura.  The company also provides fixed line and broadband services in Rajasthan. It offers its services under the brand ‘Airtel’.

As of September 30, 2023, Bharti Hexacom had invested ₹20,300 crore in capital expenditure in its future ready digital infrastructure. The company also derives significant synergies from its relationship with its promoter, Airtel, through the expansive digital infrastructure, digital experience and the digital services it provides to its customers.

On the financial front, the company posted a net profit of ₹549 crore in FY23, down 67.2% compared to the previous year, while revenue from operations rose 21.7% to ₹6,579 crore. For the six-month ended September FY24, net profit fell 64.6% year-on-year to ₹69 crore, dented by higher tax costs and exceptional loss, but revenue increased 8% YoY to ₹3,420 crore.

SBI Capital Markets Limited, Axis Capital Limited, BOB Capital Markets Limited, ICICI Securities Limited and IIFL Securities Limited are the Book Running Lead Managers (BRLMs) to the issue.

Meanwhile, shares of Bharti Airtel were trading marginally higher by 0.4% at ₹1,232.60 against the previous closing price of ₹1,227.85 on the BSE.

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