In Short:
Bharti Hexacom has set a price band of Rs 542-570 per share for its upcoming Rs 4,275 crore IPO on April 3. The IPO will allow TCIL to sell 15% of its shares in the Bharti Airtel unit. Bharti Airtel will retain 70% stake post-IPO. The government is expected to earn over Rs 5,000 crore from this stake sale. Airtel has waived off RoFR to buy TCIL’s stake in Hexacom.
Details of Bharti Hexacom’s IPO Pricing and Stake Sale
Bharti Hexacom has set a price band of Rs 542 to Rs 570 per share for its upcoming Rs 4,275 crore IPO scheduled to open on April 3. This IPO will allow Telecommunications Consultants India Ltd (TCIL) to divest 15% of its shares in the Bharti Airtel unit.
Offer Details
The offer will follow the book-building process as per Sebi’s ICDR Regulations. The floor price is 108.4 times the face value of Rs 5 while the cap price is 114 times the face value of the equity shares on offer.
Stake Details
Bharti Hexacom runs mobile services in Rajasthan and the northeast circles. Bharti Airtel will retain its 70% stake post-IPO, while TCIL’s stake will reduce to 15%. The IPO closes on April 5, and the government is expected to earn around Rs 5,000 crore from the stake sale.
Stock Performance
Airtel’s shares were down by 1.06% on BSE on Tuesday afternoon trade. The anchor investor bidding will open on April 2, a day before the IPO date.
TCIL Stake Sale Strategy
TCIL plans to sell its 30% stake in Bharti Hexacom in two tranches of 15% each. The company has already filed a red herring prospectus dated March 22 for the IPO.
BofA Securities Analysis
BofA Securities highlighted that Airtel sees transparency in pricing as a key requirement for government stake divestment in its subsidiary. Airtel had waived off its RoFR to acquire TCIL’s stake in Bharti Hexacom.
Future Projections
Experts believe that fixed wireless services have high potential in the Hexacom circles (Rajasthan and the northeast), despite similar connected home-pass costs for Airtel and Hexacom circles.
