Bharti Hexacom IPO opens; raises ₹1,923.7 cr via anchor investors

The initial public offering (IPO) of Bharti Hexacom, a wholly owned subsidiary of telecom major Bharti Airtel, has opened for subscription today.

Soon after opening, the IPO was subscribed 0.03 times, with the quota for retail individual investors(RIIs) subscribing 0.12 times by 11 AM. The quota for the non-institutional investors has been subscribed 0.3 times, the consolidated bid details on the NSE show. Of the total 4,12,50,000 shares on offer, shareholders have placed bids for 12,84,374 shares.

As per the revised document filed with market regulator SEBI, the company has reserved 75% of the issue size for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs), and the remaining 10% for retail investors.

The anchor allocation report shared by the company shows the board of directors have finalised the allocation of 3.37 crore equity shares to the anchor investors at ₹570 per equity share. A total of 97 anchor investors took part in the anchor book. They were allocated 3.37 crore shares, thereby raising ₹1,923.7 crore shares.

Out of the total allocation of 3.37 crore shares to anchor investors, 1.38 crore shares i.e. 41.12% of the total allocation quota were allocated to 22 domestic mutual funds via 55 schemes. They acquired a total of 1.38 crore shares, raising ₹791.02 crore.

Bharti Hexacom has fixed the price band at ₹542-570 per share for its initial public offering (IPO). The telecom company looks to raise ₹4,275 crore at the upper band of the issue price, which is entirely an issue of an offer for sale (OFS) of 7.5 crore shares by its only public shareholder, Telecommunications Consultants India.

The lot size is 26 shares and multiple after that. The minimum amount of investment required by retail investors is ₹14,820 for one lot (26 shares) and a maximum of 13 lots, or 338 shares for ₹192,660. The allotment of shares to applicants is expected to be finalised on April 8, and the stocks are likely to be listed on the BSE and NSE on April 12, 2024.

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 owns the remaining 30%, or 15 crore, equity shares in the mobile telephony services company. Under the OFS, Telecommunication Consultants of India will offload 7.5 crore equity shares, or 15%, stake in the company.

Bharti Hexacom 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.

Established on April 20, 1995, Bharti Hexacom is the largest mobile telephony service in Rajasthan and North Eastern circles in India. It offers its services under the brand ‘Airtel’. Bharti Hexacom concluded the financial year 2023 with a net profit of ₹549 crore, down 67.2% compared to the previous year, while revenue from operations rose 21.7% to ₹6,579 crore in FY23.