In Short:
TCIL is planning to sell 15% stake in Bharti Hexacom in two tranches to meet government targets. Bharti Airtel’s unit received Sebi approval for IPO. TCIL initially planned to offload 20% equity but now aims for 15% stake sale due to undisclosed reasons. The state-owned company will sell 7.5-crore shares. TCIL must sell the remaining 15% stake within six months as per regulations. Bharti Hexacom’s net profit in FY2023 was Rs 549.2 crore.
TCIL Plans to Sell Stake in Bharti Hexacom to Meet Government Target
Telecommunications Consultants India Limited (TCIL) is looking to sell its stake in Bharti Hexacom in two tranches of 15 percent each, in order to meet the target set by the Centre. A senior official informed ETTelecom that TCIL will first sell 15% stake in Bharti Hexacom, followed by another 15% at a later date within the next six months.
Approval for IPO
Bharti Airtel’s unit Bharti Hexacom recently received approval from the Securities and Exchange Board of India (Sebi) for an initial public offering (IPO). Initially, TCIL sought to offload 20% equity in Bharti Hexacom but has now revised its plan to divest 5% less.
Sunil Mittal-driven telco Bharti Airtel currently holds a 70% stake or 35 crore shares in Bharti Hexacom, while the remaining 30% shareholding, equivalent to 15 crore equity shares, is held by non-promoter TCIL as per the draft red herring prospectus (DRHP).
Government Target Achievements
The Prime Minister Narendra Modi-led government has set a target range of Rs 28,000 crore to Rs 35,000 crore. By offloading part of its stake in Bharti Hexacom, TCIL hopes to achieve this target, as stated by a source familiar with the matter.
TCIL is required to sell its remaining 15% equity within the lock-in period of six months, as per regulatory requirements.
Financial Performance and Market Participation
Bharti Hexacom reported a net profit of Rs 549.2 crore in FY2023, a 67.2% decrease from the previous year. The subsidiary of Bharti Airtel offers mobile, fixed-line telephony, and broadband services under the Airtel brand in Rajasthan and the Northeast.
Axis Capital, BOB Capital Markets, ICICI Securities, SBI Capital Markets, and IIFL Securities have been appointed as book-running lead managers for the upcoming issue.
