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Bharti Hexacom IPO Details: Launch Date, Share Price, Size, GMP & Review

Bharti-Hexacom-IPO-Details-Launch-Date,-Share-Price,-Size,-GMP-&-Review

Bharti Hexacom Limited – About the Company

Company was incorporated ‘Hexacom India Limited’ and later on it was renamed as “Bharti Hexacom Limited”. A wholly owned subsidiary of Bharti airtel engages in the business of wireless services, Fixed line and broadband services in the vertical of Rajasthan and particularly in North eastern parts i.e. Manipur, Meghalaya, Mizoram, Nagaland and Tripura.  As of September 30, 2023, with an aggregate of 29.1 million customers across both circles, it has a presence in 486 census towns. The customer market share of the company has grown consistently in Rajasthan from 33.1% as of March 31, 2021, to 35.1% as of September 30, 2023, and in the North East from 43.6% to 49.4% between the same dates.

In terms of revenue market share bharti haxacom enjoys top position in H1FY23. As per their DRHP filed with SEBI, Market share in Rajasthan faces some challenges however manages to click 40.3%. In previous fiscals between 2023-2019 it was 38.8%,39.5%, 36.7% & 32.7%. From northern sides also Bharti enjoys highest revenue share at around 52.1% for H1FY23.

As of September 30, 2023, with 23,748 network towers (5,005 towers owned by the company), ithas an extensive distribution and service network across the regions. To reach to its customers, it has set up 18 retail outlets and 8 small format stores to reach 88 citiesthat are covered by a strong distribution network of 617 distributors and 88,586 retail touchpoints.

Bharti Hexacom IPO Objectives

Bharti Hexacom has 2 major share holders.

  1. Bharti Airtel
  2. Government of India.

Bharti airtel owns 70% while GOI owns remaining 30% .

So major objective of this issue is to dilute GOI holding via offer for sale  ( OFS) of 7.5 Cr equity shares hold by Telecommunications Consultants India Ltd, a central public undertaking. Another objective is to issue fresh equity shares to complete its working capital requirements.

Also Read: What to Know Before Investing in Stocks: 10 Things to Consider

Bharti Hexacom IPO Details:

IPO Open Date April 3, 2024
IPO Close Date April 5, 2024
Basis of Allotment Monday, April 8, 2024
Listing Date Friday, April 12, 2024
Face Value Rs 5 per share
Price ₹542 to ₹570 per share
Lot Size 26 Shares
Total Issue Size 75,000,000 shares
(aggregating up to ₹4,275.00 Cr)
Fresh Issue No Fresh Issue
Offer For Sale 75,000,000 shares of ₹5
(aggregating up to ₹4,275.00 Cr)
Issue Type Book Built Issue IPO
Listing At BSE & NSE
QIB Shares Offered Not More than 75% of the Net Issue
Retail Shares Offered Not More than 10% of the Net Issue
NII (HNI) Shares Offered Not More than 15% of the Net Issue

Bharti Hexacom IPO Issue Price & Size

The issue price of the Bharti Hexacom IPO is between the price ranges of Rs 542 to Rs 570. Investors looking to bid can apply in the Bharti Hexacom IPO between these price bands. The total issue size of Bharti Hexacom IPO is Rs 4275 crore which will be entirely offer-for-sale (OFS) of 7.5 crore equity shares and there will be no fresh issue.

Bharti Hexacom IPO Launch Date

The Bharti Hexacom IPO will be open on (April 3, 2024 ) and closed on ( April 5, 2024 ). That means investors can bid between the (April 3, 2024 to April 5, 2024). The basis of the allotment date and listing date will be also updated soon as per the official dates declared by the company at the time of the IPO launch.

Bharti Hexacom Financial Statements:

Particulars (Rs in Million) FY24 (6M) FY23 (6M) YoY (%) FY23 FY22 FY21 CAGR
Revenue from Operations 34202.0 31670.0 8.0% 65790.0 54052.0 46023.0 19.6%
Other Income 1377.0 557.0   1402.0 888.0 1020.0
Total Income 35579.0 32227.0 10.4% 67192.0 54940.0 47043.0 19.5%
Operational Expenses 16807.0 17646.0   35995.0 34668.0 34285.0
Other expenses 836.0 1099.0   1938.0 1244.0 1214.0
EBITDA 17936.0 13482.0 33.0% 29259.0 19028.0 11544.0 59.2%
EBITDA Margin% 52.44% 42.57%   44.47% 35.20% 25.08%
Depreciation 8465.0 7625.0   15533.0 14410.0 12852.0
Interest 3099.0 3248.0   6388.0 5718.0 5166.0
Profit Before Tax 6372.0 2609.0 144.2% 7338.0 (1100.0) (6474.0)  
Exceptional items (net) 3030.0 - - - (19511.0) 3417.0  
Total tax 2651.0 657.0   1846.0 1665.0 448.0
Profit After Tax 691.0 1952.0 -64.6% 5492.0 16746.0 (10339.0)  
PAT Margin% 2.02% 6.16%   8.35% 30.98% -22.46%  
EPS Diluted (Rs) 1.38 3.90 -64.6% 10.98 33.49 (20.68)  

Source: DRHP

Bharti Hexacom Financial Performance

Topline line growth of Bharti Hexacom stood at Rs 3420.2 cr for HIFY24 shown some sign of improvement from the corresponding previous year.  EBITDA stood at 1793.6 cr grown substantially @ 33% for the same period  but bottom line reduces significantly to Rs 69.10 cr YoY basis on account of exceptional items. In previous year FY23 topline stood at Rs 6579 cr, a CAGR growth of almost 19 % while EBITDA  was Rs 2925.9 cr. Net profit was only 549.20 cr in FY23 against Rs 1674.6 cr profit in FY22.   The EBITDA margin of the company has improved quite well in the past three years. In FY21 the same was 25% that has surged to 44.5% in FY23 and 52.44% in the first half of FY24. However, owing to exceptional items and higher interest costs, the PAT margin of the company was not consistent in the last three years. In FY23 the same was at 8.35% but it has come down to 2% in the first half of FY24 that is not comparable, as there was a huge amount of exceptional items that has affected the net margins.

Bharti Hexacom IPO Promoters & Shareholding of the Company

S.No. Name of the Shareholder Number of Equity Shares Held % of the pre-Offer
Equity Share capital (in %)
       
1 Bharti Airtel Limited 35,00,00,000 70.00%
2 Telecommunications Consultants India
Limited
15,00,00,000 30.00%
 
  Total 50,00,00,000 100.00%

Source: DRHP

Why Invest in Bharti Hexacom IPO?

While investing in an IPO-bounded company you should check its fundamentals that help to know its financial performance and competitive strength that drives its business growth. Fundamental analysis apart from financial and competitive strength, also help you to know the risk factors that can affect the business operations and future prospects of the company. After evaluating the variables such strength weakness, financials, you may strike a balance and decide to invest or not invest in an IPO.

Also Read: Difference Between Fundamental Analysis and Technical Analysis

In a listed company, apart from fundamental analysis, you can also perform the technical analysis, which also helps to know the share price valuation and movement as per the performance of the company. However, for an unlisted company, or company that introduced the IPO, you have only options to analyse the fundamentals of the company and compare the share price valuation from its listed peer group companies.

Also Read: What to Check Before Buying IPO: Things to Know & Is it Safe

Competitive Strengths:

  • Bharti Hexacom is backed by an established brand name – Airtel which owns 70% of our outstanding equity share capital in Bharti Hexacom. Airtel provides communications solutions globally with more than 500 million customers in 17 countries across the Africa and South Asia. In India, it has a revenue market share of around 37% giving an advantage of operating under a well-known brand name.
  • At nearly 115 crore wireless telecom customers India telecom market stand as a second largest market in the world. The number of wireless telecom customers rose from 904.5 million in Fiscal 2014 to a high of 1,183.4 million in Fiscal 2018 showing that Indian telecom industry growth is led by wireless services.
  • The increasing affordability of smartphones, complemented with a subsequent progress in making a digital India has led to increase in the data consumption among telecom users. The growth in data customers also increased internet penetration, as a percentage of the total population, from 20.3% as of Fiscal 2014 to 63.5% as of Fiscal 2023 showing the further growth opportunities for the telecom operators.
  • Telcos have added 40 lakh base transceiver stations (BTSs) for 5G coverage during Fiscal 2024. As with, the more penetration of 5G network in rural areas with more affordable data cost, will help the telecom operators like Bharti Hexacom to improve their revenue from the data services.
  • Talking of position, Bharti Hexacom is at the number one position in the North East circle during the six months ended September 30, 2023, and Fiscals 2023 and 2022. In the Rajasthan circle, the market share differential has narrowed between the market leader and itself, between Fiscal 2021 and the six months ended Sep 30, 2023, and stood at second position in the six months ended Sept 30, 2023.
  • Bharti Hexacom has a 6.64 crore telecom subscriber base in Rajasthan, contributing to 5.6% of overall India telecom customers. Rajasthan, with a teledensity of 79.5% as of Fiscal 2023, lags behind the national average of 84.5% due to its lower rural teledensity of 57.2%. The state customer base is expected to grow from 1% to 1.5% between fiscal years 2023 and 2028 to about 68 to 68.5 million. Rajasthan will follow the pan-India teledensity trend of 83% to 83%, and rising rural teledensity will help to increase its revenue.
  • As of September 30, 2023, the company has 486 census towns in the two circles in which it is operating with owned and leased 23,748 network towers. Though Bharti Hexacom is present in two circles, its customers will benefit from Airtel’s pan-India telecommunication network as well as its other infrastructure and overseas operations and network.
  • The company has an widespread sales and distribution network across the rural and urban areas of the Rajasthan and North East circles that are serviced by 617 distributors and 59 stores operated by the company, as of September 30, 2023. Its exclusive retail footprint comprising 88,586 retail touchpointsis one of the key differentiators, including supporting high-value customers and providing them with a superior experience. The company has alsocreated 5G experience zones across all our large format retail stores that will help to attract the customers to value-focused post-paid and Airtel Black services, while its retail touchpoints focus on onboarding new customers and selling recharge packages to pre-paid customers.
  • As a part of its growth strategy, it premiums its portfolio with continuous upgrades from 2G to 4G/5G customers, upgrading customers within our 4G plans for higher data packs, pre-paid to post-paid upgrades, contextual data monetisation, and converged offerings. This will help the company to drive its ARPU growth agenda in the absence of tariff hikes.
  • Between March 2021, and September 2023, the company has increased its coverage in non-census towns and villages from 63,368 to 66,302. Expansion in rural coverage helped the company to increase the market share of 4G/5G customers on Sep 30, 2023.
  • To maintain an efficient capital structure with high balance sheet flexibility company seeks to continue to manage its borrowing costs with a focus on cost-effective financing structures, including its repayment tenors and the balance between fixed and floating rate instruments. This will help the company improve the cost efficiencies improving its credit ratings and conservative risk management policies.

Also Read: What are the Risk Factors Involved in Applying for an IPO

Risks Factors:

  • The Indian telecom sector is one of the highest competitive in the world making it difficult for the operators to maintain its market share. Bharti Hexacomis also facing the competition from other companies such as Reliance Jio Infocom, Vodafone Idea Limited and BSNL. In the Rajasthan and North East circles, where it is operating, its market shares declined in the past decades.
  • The company is operating in a highly regulated telecommunications market. Its licenses and spectrum allocations are subject to terms and conditions, ongoing review and varying interpretations, each of which may result in modification, suspension, early termination, expiry on completion of the term or additional payments that could adversely affect its business.
  • Apart from that, any reduction in the projected revenue that the company earn for its telecom services, due to regulatory ceilings on pricing, or owing to pricing pressure, may have an adverse effect on the business operations and financial condition of the company.
  • The company is deriving its revenues from providing mobile telephone services in Rajasthan and the North East circle and any unfavourable developments in such regions could adversely affect the business operations and financial condition of the company.
  • As per the DRHP, certain outstanding legal proceedings are running against the Company and its Promoters. Any adverse outcome in any of these proceedings may adversely affect the reputation, business operations and financial condition of the company.
  • The company have supply and services agreements with key suppliers and vendors, If its contractual arrangements with such vendors expire or terminate, or the company fails to receive the quality of equipment and maintenance services that are required it will affect its business.

Bharti Hexacom IPO Grey Market Premium (GMP)

Grey market premium is the premium quoted over the IPO issue price. GMP shows that investors are ready to pay above the upper band of the IPO issue price. GMP is determined in the grey market as per the demand and supply of the shares in the primary market. A grey market is that unofficial ecosystem of unlisted companies'stocks that start trading even before the launch of the IPO to the date of its listing.

Also Read: What is Grey Market Premium in IPO: How is GMP Calculated & Reliable

However, GMP is not a reliable factor, as it keeps fluctuating as per the demand and supply of shares in the primary market.There are numerous factors that affect the stock market in India and individual stock prices of different companies that are already listed and trading in the secondary market. However, for an IPO-bounded company, you can consider the GMP as the speculative listing price of the share

According to various online sources, the Grey Market Premium or GMP of the Bharti Hexacom is trading around Rs 50 in the grey market. It means shares are trading at the upper band issue price of Rs 620 with a premium in the grey market and may list around the same price.

Bharti Hexacom IPO Review & Analysis

While considering the FY23 financials, EPS of the Bharti Hexacom stood at Rs 10.98 per share. While owing to some exceptional items that reduced its net profit, the EPS for the first half of FY24 was only Rs 1.38 per share, which represents the annualized EPS of Rs 2.76 per share for FY24E. That is not accountable for evaluating the share price of the company.

Also Read: What to Check Before Buying IPO: Things to Know & Is it Safe

Hence, we can consider the EPS of Rs 10.98 per share of FY23 and using this EPS, you can calculate the PE at which the IPO price is going to be issued. If the share price of Bharti Hexacomis issued at a lower price, means its shares are available at a cheaper valuation compared to its peer group companies, and then you can apply or subscribe for the issue with the listing gain to medium-term investment point of view.

Also Read: Benefits of Investing in the Stock Market: Advantages of Share Market

On the other hand, if the share price of Bharti Hexacom in IPO is issued at a very high premium or available at a much higher valuation compared to its listed peers then you can either avoid applying in the IPO or can invest only with the long-term viewpoint.

How to Apply for Bharti Hexacom IPO?

To apply in Bharti Hexacom IPO you need to opendemat account to hold your allotted shares and a trading account to sell or buy the shares into the secondary market. And not only applying in the IPO, but while buying or selling the shares in the stock market you also need both these types of accounts. Hence, you can apply here at Moneysukh to open a trading and demat account at the lowest brokerage.

Also Read: Features of Best Demat Account with Lowest Brokerage Charges in India

Having both these accounts at Moneysukh, you will get the advantages of the best online trading apps to trade or invest in equities, commodities and currencies. Here you will get the flexibility to choose the best trading platform and advanced trading software like Keev,TradeTron, Quantman, AlgoBulls,Trade Radar, and FoxTrader all integrated with TradingView to facilitate the best trading experience.

Also Read: Equity or Commodity which is better for Trading or more Profitable

Moreover, you can also start algo-trading – a high-frequency trading mechanism to choose the best algo-trading platforms and trade withbest intraday algo-trading strategy at the lowest brokerage pricing. At Moneysukh you can also get stock recommendations and tips backed with research reports and useful tutorials on the stock market to help the clients understand the stock market in a better way. However, right now to apply for the Bharti Hexacom IPO you can follow the steps given below.

Steps to Apply for Bharti Hexacom IPO:

Step 1: When Bharti Hexacom IPO opens you can bid online.

Step 2:Just go to trade.moneysukh.com and log in with your User ID & password.

Step 3:Now look for the IPO section and click on the Bharti Hexacom IPO.

Step 4:Here you need to fill in the required details like price, quantity, and so on.

Note: At the time of applying for the IPO, make sure to bid at the cutoff price and then submit your application. 

Step 5:Now make the required payment and then submit your IPO application successfully.

How to Check Bharti Hexacom IPO Allotment Status?

Checking the allotment status online is very easy if you have the PAN details and IPO application number. But checking the details of the IPO allotment is possible only when the basis of allotment is arrived. In the case of Bharti Hexacom IPO, you can also check the allotment status through various online sources.

Also Read: How to check IPO allotment status on NSE, BSE through Moneysukh

And the basis of the allotment is highly dependent on the oversubscription of the IPO. If the IPO is oversubscribed by many folds, then for the investors who applied through the retail category or HNI category, the chances of getting the allotment become very low. Here while applying to such over-demanding IPOs you can follow some tips to improve your chances of getting the allotment in IPO.

Also Read: How to Increase the Chances of IPO Allotment

And when due to oversubscription of IPOs, you don’t get any allotment of shares, then your money will be refunded back into your bank account or fun will be unblocked if you applied through ASBA. However, despite the oversubscribed IPO, if get the allotment then the allocated shares will be transferred into your demat account any time before the date of listing. That you can sell in the secondary market after listing or keep from the long-term investment point of view.

Also Read: Why You Should Invest in the Stock Market: Reasons  & Benefits

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