Bharti Hexacom IPO set for April 3

The Bharti Hexacom IPO includes only an offer-for-sale (OFS) with no fresh issue part.

Bharti Hexacom, a subsidiary of Bharti Airtel, is poised to launch its initial public offering (IPO) on April 3, marking the first IPO of the fiscal year 2024-25.

Offer Details

• The price band for the IPO will be disclosed next week, with the public issue closing on April 5.
• An anchor book will be open for a day on April 2.
• The IPO comprises only an offer-for-sale (OFS) with no fresh issue component.
• Telecommunications Consultants India, the sole public shareholder, plans to offload 7.5 crore equity shares or 15 percent stake in the OFS.
• Bharti Airtel, the promoter, holds a 70 percent stake, while Telecommunications Consultants India owns the remaining 30 percent shares (15 crore).

Allocation Breakdown

• 75 percent of the issue size is reserved for qualified institutional buyers, 15 percent for non-institutional investors (i.e., high net worth individuals), and the remaining 10 percent for retail investors.

Financial Performance

• Despite a 67.2 percent year-on-year decline in net profit at Rs 549.2 crore for FY23, Bharti Hexacom witnessed healthy topline and operating numbers. This decline was attributed to a higher base in the previous year due to exceptional gains.
• Revenue from operations grew by 21.7 percent to Rs 6,579 crore during FY23.
• EBITDA surged by 53.6 percent to Rs 2,785.7 crore, with a margin expansion of 878 bps at 42.34 percent.
• In the nine months ended December FY24, net profit dropped by 18.9 percent to Rs 281.8 crore due to exceptional loss and higher tax costs, although supported by higher other income and operating numbers.
• Revenue from operations in 9MFY24 increased by 7.7 percent to Rs 5,220.8 crore.

Conclusion

The Bharti Hexacom IPO presents an opportunity for investors to participate in the telecom sector’s growth story, with the company showcasing resilience and robust operational performance despite challenges. 

As the IPO unfolds, market participants will closely monitor price band announcements and subscription trends.