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Bharti Hexacom, a unit of Bharti Airtel, receives SEBI’s approval for IPO

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In Short:

Bharti Hexacom, a unit of Bharti Airtel, has received SEBI’s approval for its IPO which will be an offer for sale (OFS) by TEC. The IPO won’t bring fresh proceeds to Bharti Hexacom but will change ownership structure with TEC selling its stake. Bharti Hexacom operates in Northeast India and Rajasthan, with 29.1 million customers and mid-band spectrum for 5G. Despite higher revenues, profits dropped in the first half of 2024.

Bharti Hexacom Receives SEBI Approval for IPO

Bharti Hexacom, a unit of Bharti Airtel, has received approval from SEBI (Securities and Exchange Board of India) to proceed with its IPO (Initial Public Offer). However, this IPO will not result in fresh proceeds for Bharti Hexacom. It is solely an Offer for Sale (OFS) of up to 10 crore shares by Telecommunications Consultants India (TEC), a body within the Department of Telecommunications (DoT), looking to sell its stake in the company.

Ownership Structure Changes, No Fresh Proceeds

This IPO will only alter the ownership structure of the company, with no new funds being raised. Bharti Hexacom operates in Northeast India and Rajasthan, with Bharti Airtel remaining as the majority stakeholder even after the stake sale by TEC.

Key Business Operations and Financial Performance

Bharti Hexacom provides mobile services in states like Manipur, Arunachal Pradesh, Meghalaya, Nagaland, Mizoram, Tripura, and Rajasthan. The company’s average revenue per user increased from Rs 135 in FY21 to Rs 195 in the first half of September 2023.

With approximately 29.1 million customers, Bharti Hexacom holds mid-band spectrum enabling the provision of 5G Plus services. Revenues for the first six months of September 2023 totaled Rs 3,240 crore, slightly up from Rs 3,167 crore in the same period the previous year.

However, profits dropped from Rs 195 crore to Rs 69 crore YoY during this period. The company saw an increase in the number of mobile towers, reaching 23,748 in the first half of 2024 from 19,965 the previous year. Bharti Hexacom has been actively investing in 5G, extending its presence to 486 census towns as of the last report.

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