Bharti Airtel's subsidiary Bharti Hexacom on Tuesday fixed the price band at ₹542-570 per share for its initial public offering (IPO), which is likely to be around ₹4,300 crore. The issue will open on April 3 and conclude on April 5. The anchor investor bidding will open on April 2, the company said in a statement.
The Bharti Hexacom IPO is entirely an offer for sale (OFS) of up to 10 crore shares by the only public shareholder, Telecommunications Consultants India. Since the issue is an OFS, Bharti Hexacom will not receive any proceeds.
Promoter Bharti Airtel owns 70% stake in the company and the remaining 30% stake (15 crore equity shares) is held by Telecommunications Consultants India who will offload 7.5 crore equity shares or a 15% stake in the OFS.
The company has set aside 75% of the issue size for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs/HNIs), and the rest 10% for retail investors.
Days ago, Bharti Hexacom received capital markets regulator SEBI's go-ahead to raise funds via an IPO. This will be the first IPO from the Bharti Group after over a decade.
The last IPO to have come out from the Bharti Group was Bharti Infratel, now known as Indus Towers, which was listed back in 2012.
SBI Capital Markets, Axis Capital, BOB Capital Markets, ICICI Securities, and IIFL Securities are the book running lead managers to the IPO, while KFin Technologies is the registrar.
Bharti Hexacom will finalise the basis of allotment of IPO shares by April 8 and investors can trade in the IPO shares from April 12. Considering the upper price band, Bharti Hexacom is expected to have a market capitalisation of ₹28,000 crore.
Company overview
Bharti Hexacom runs mobile services in Rajasthan and the Northeast telecommunication circles of India, which comprises Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura. It has a market share of 40% in Rajasthan and 50% in the Northeast.
Bharti Hexacom, as per its annual report, is targeting to cover all the urban areas and a few pockets of rural areas with 5G services by March this year. Airtel’s 5G Plus offers up to 30 times faster download speeds than 4G, it claimed in its annual report adding that the 5G handset ecosystem is gradually evolving with more choices for customers at affordable price points.
For FY23, the Airtel unit recorded a net profit of ₹549 crore. Its revenue from operations remained strong rising 22% to ₹6,719 crore.
For the six months ended September, the company posted a revenue of ₹3,420 crore, compared to ₹3,167 crore in the same period a year ago. However, its net profit declined to ₹69 crore from ₹195 crore in the year-ago period. The profit was impacted by higher tax costs and exceptional loss.
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