Bharti Hexacom Share Price: Bharti Hexacom shares made a bumper debut on the bourses today. The shares got listed at a 32.4 per cent premium of Rs 755, as against the IPO price of Rs 570. The listing gains beat analyst estimates of a 12-15 per cent premium.
Bharti Hexacom IPO Details
This will mark the first public offering in the 2024-25 fiscal year. The company’s IPO is entirely an offer-for-sale (OFS) of 7.5 crore equity shares, indicating a 15 per cent stake by Telecommunications Consultants India Ltd, with no fresh issue component.
The minimum lot size for an application is 26 shares. The minimum amount of investment required by retail investors is Rs 14,820. The minimum lot size investment for small NII is 14 lots (364 shares), amounting to Rs 2,07,480, and for big NII, it is 68 lots (1,768 shares), amounting to Rs 10,07,760.
Bharti Hexacom’s Rs 4,275-crore IPO — India’s biggest public issue in one year — had garnered robust subscription figures at nearly 30 times its allotted quota. Qualified institutional investors led the pack, subscribing 48.57 times their allocation. Non-institutional investors followed closely, buying 10.52 times their portion, while retail investors showed strong interest by subscribing 2.83 times the reserved portion.
Since it is an offer-for-sale or OFS, Bharti Hexacom will not receive any proceeds from the IPO. At present, promoter Bharti Airtel holds 70 per cent stake and the remaining 30 per cent stake is owned by Telecommunications Consultants India.
Bharti Hexacom provides telecommunication services in Rajasthan and the North East. At the upper-end of the price band, the IPO size will be Rs 4,275 crore. About 75 per cent of the issue size has been reserved for qualified institutional buyers (QIBs), 15 per cent for non-institutional investors and the remaining 10 per cent for retail investors.
Bharti Hexacom, which filed its preliminary IPO papers with Sebi on January 20, obtained its nod on March 11, to float the maiden public issue. SBI Capital Markets, Axis Capital, BOB Capital Markets, ICICI Securities, and IIFL Securities are the book-running lead managers of the public issue.
Sunil Mittal-driven telco Bharti Airtel holds a 70% stake or 35 crore shares in the company.
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.
Should You Buy, Sell Or Hold?
Shivani Nyati, Head of Wealth, Swastika Investmart Ltd., said: “Bharti Hexacom, the subsidiary of Bharti Airtel, defied pre-listing predictions of a modest debut and delivered a strong performance on the stock exchanges. The company is listed at Rs. 762 per share, translating to a significant 33% gain over its issue price of Rs. 570. This impressive listing surpasses pre-listing expectations, which were tempered by concerns about the company’s financial performance and valuation.”
“Bharti Hexacom leverages the established brand reputation of Bharti Airtel, fostering investor confidence. The company operates in high-growth markets, particularly fixed-line telephone and broadband services, which may have attracted investors seeking long-term value,” she added.
“However, inconsistencies in financial performance, coupled with a recent decline in profits, warrant ongoing monitoring. Also, the telecom sector is intensely competitive, demanding strategic innovation to maintain market share. While the listing exceeded expectations, the pre-identified risks remain relevant. Existing investors may consider holding their shares, while new investors should closely monitor the company’s performance and market conditions before making a fresh entry,” she said.
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