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Bharti Hexacom IPO scheduled on April 3, TCIL to divest 15% stake

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In Short:

Bharti Hexacom, a subsidiary of Bharti Airtel, is going public with an IPO on April 3, 2024. Telecommunications Consultants India Limited (TCIL) will sell a 15% stake in the company, reducing its ownership from 30% to 15%. Bharti Airtel’s stake will remain unchanged. The IPO will not generate fresh proceeds for TCIL. Bharti Hexacom operates in the Northeast and Rajasthan, offering 5G services with a growing customer base. Profit dropped in the first half of FY24 despite increased tower count.

Bharti Hexacom IPO Set for April 3

bharti hexacom ipo set for april 3

Bharti Hexacom, a Bharti Airtel subsidiary, is set to open for IPO (Initial Public Offer) on April 3, 2024. Telecommunications Consultants India Limited (TCIL), a Department of Telecommunications (DoT) unit, is set to sell a 15% stake in the company to the public. At present, TCIL owns a 30% stake in the company and the remaining stake is with Bharti Airtel. Post IPO, a 15% stake of TCIL will be sold to the public, and TCIL’s stake will come down to 15% from the current 30%, while Bharti Airtel’s stake will remain unchanged.

Offer for Sale (OFS) Details

Since it is an offer for sale (OFS) from TCIL, no fresh proceeds will be generated for the company. TCIL would only be generating money from the stake sale. Bharti Hexacom has said in a late exchange filing on Saturday that bidding for anchor investors would start a day early on April 2, 2024. The IPO will start on April 3 and finish on April 5, 2024.

Stake Selling Decision

Earlier, TCIL had decided to offload a 20% stake in Bharti Hexacom. But for now, the government body has decided to sell a 15% stake. Bharti Hexacom operates its business in the Northeast states of India as well as Rajasthan. The company has access to the mid-band 5G spectrum with which it is already serving customers with 5G NSA (non-standalone) services. The ARPU (average revenue per user) of Bharti Hexacom jumped from Rs 135 in FY21 to Rs 195 in the first six months of September 2023.

Customer Base and Tower Expansion

Hexacom has 29.1 million customers, and with Airtel focusing more on investing in rural areas, the subscriber count should go up significantly in the near future. In the first half of FY24, total mobile towers under Bharti Hexacom jumped from 19,965 to 23,748. It is worth noting that the company’s profits dropped from Rs 195 crore to Rs 69 crore YoY in the first half of FY24.

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