Bharti Hexacom Limited
Bharti Hexacom Limited is a telecom company part of the Bharti Airtel Group. It provides telecom services such as broadband, mobile and other telecom services across India including North-East India and Rajasthan.
About Company
Bharti Hexacom Limited, a subsidiary of Bharti Airtel, is a prominent player in the Indian telecommunications sector. Established on April 20, 1995, the company has carved a niche for itself by providing exceptional fixed-line telephone and broadband services, primarily in the Rajasthan and North East telecom circles of India.
The company's journey began over two decades ago, and since then, it has been at the forefront of the telecom revolution in India. Bharti Hexacom's services span across key states such as Rajasthan, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura. The company's commitment to connecting the remote and rural areas of these regions has been a significant factor in its growth and popularity.
In recent developments, Bharti Hexacom Limited made headlines with its Initial Public Offering ("IPO"), which opened for subscription on April 3, 2024, and closed on April 5, 2024. The IPO was a book-built issue, with the price band set at INR 542 to INR 570 per share, and the issue size aggregating to INR 4,275 crores. This move was seen as a strategic step to fuel further expansion and consolidate its market position.
The IPO garnered significant interest from various investor categories, including Qualified Institutional Buyers ("QIBs"), Non-Institutional Investors (NIIs), Retail Individual Investors (RIIs), and Anchor investors. The company raised INR 1,923.75 crore from anchor investors before the public issue, indicating strong market confidence in Bharti Hexacom's business model and future prospects.
Bharti Hexacom's association with Airtel, one of India's leading telecom service providers, has been instrumental in its growth. The company leverages Airtel's robust infrastructure and innovative technology to offer cutting-edge services like Airtel 5G Plus, which promises up to 30 times faster speeds than the current networks.
The company's focus on customer-centricity is evident in its offerings, such as the one recharge plan that includes unlimited entertainment with a Netflix subscription and 3 GB data per day for 84 days. Such bundled services cater to the evolving needs of consumers who seek convenience and value for money.
As Bharti Hexacom Limited continues to evolve, it remains dedicated to enhancing connectivity and digital empowerment in India. Its recent IPO is just another chapter in its long and successful journey, promising to bring more innovation and quality services to its customers.
Company Financials
IPO Timeline (Tentative Timetable)
Issue Announcement and Pre-IPO Preparations
Before the IPO, Bharti Hexacom Limited, a prominent player in the telecommunications industry, had established a strong presence in the Rajasthan and North East telecommunication circles. The company, known for providing consumer mobile services, fixed-line telephone, and broadband services under the brand name 'Airtel', decided to go public to further its growth and expansion plans.
IPO Open Date: April 3, 2024
The IPO journey began on April 3, 2024, when Bharti Hexacom Limited opened its issue for subscription. The company set the price band at INR 542 to INR 570 per share, with a face value of INR 5 per share. The total issue size was pegged at 75,000,000 shares, aggregating up to INR 4,275.00 crores, entirely as an offer for sale.
Subscription Period: April 3, 2024, to April 5, 2024
The subscription window for the IPO remains open for three days, allowing investors to bid for the shares. The minimum lot size for an application was set at 26 shares, with the minimum investment amount required by retail investors being INR 14,820.
Anchor Investors Bid Date: April 2, 2024
A day before the subscription period, Bharti Hexacom Limited raised INR 1,923.75 crores from anchor investors. The anchor portion comprised 33,750,000 shares, with a lock-in period ending on May 8, 2024, for 50% of the shares and July 7, 2024, for the remaining shares.
Allotment Finalization: April 8, 2024
Following the closure of the subscription period, the allotment of shares will be finalized on April 8, 2024. The company had a reservation of shares for different investor categories, including Qualified Institutional Buyers ("QIB"), Non-Institutional Investors ("NII"), Retail Individual Investors ("RII"), and Anchor investors.
Listing Date: April 12, 2024
The shares of Bharti Hexacom Limited will be listed on the Bombay Stock Exchange ("BSE") and the National Stock Exchange ("NSE") on April 12, 2024.
IPO Details
Competitive Strength
Bharti Hexacom Limited, a subsidiary of Bharti Airtel, has been a significant player in the Indian telecommunications sector, particularly in the Rajasthan and North-East circles. As the company prepares for its Initial Public Offering ("IPO"), it's crucial to delve into the competitive strengths that position Bharti Hexacom as a formidable entity in the market.
Leadership and Market Presence
Bharti Hexacom has established itself as a leader in its operational areas, boasting a large customer base that relies on its services. With a revenue market share of 40.40% in Rajasthan and an impressive 52.7% in the North East circle as of December 31, 2023, the company's dominance is evident.
Strategic Investments and Network Expansion
The company's commitment to investing in network expansion and technology advancement has been unwavering. With a capital expenditure of INR 206 billion directed towards creating a future-ready digital infrastructure, Bharti Hexacom is well-positioned to meet the evolving demands of the telecommunications industry.
Financial Performance
Despite a mixed financial performance, Bharti Hexacom has shown growth in equity and assets, indicating potential for expansion. The increase in Average Revenue Per User ("ARPU") from INR 135 in Fiscal 2021 to INR 197 by the end of December 2023 reflects the company's ability to enhance its revenue streams.
Robust Parentage and Brand Value
The strong parentage of Bharti Airtel provides Bharti Hexacom with a competitive edge, lending credibility and a sense of reliability to the brand. This association has helped the company in building a reputation for quality and service excellence.
Distribution and Service Network
An extensive distribution and service network ensures that Bharti Hexacom's offerings are accessible to a wide demographic, further solidifying its market position. The company's presence in markets with high growth potential augments its ability to scale and adapt to market dynamics.
Experienced Management Team
The expertise and experience of the management team have been pivotal in steering the company through the competitive landscape. Their strategic decision-making and operational excellence have been instrumental in maintaining Bharti Hexacom's competitive stance.
Challenges and Considerations
While the strengths are noteworthy, potential investors and stakeholders must also consider the challenges faced by the company. These include regional reliance, legal issues, financial risks, regulatory compliance, and customer turnover. A thorough analysis of these factors is essential before making any investment decisions.
Conclusion
Bharti Hexacom Limited's competitive strengths lie in its established market leadership, strategic investments, robust parentage, extensive network, and experienced management. As the company ventures into the public domain with its IPO, these attributes will play a crucial role in attracting investors and sustaining growth. However, a balanced view that considers the associated challenges will be key to making informed decisions about the company's future prospects.
Company's Past Financial Performance
Bharti Hexacom Limited, a prominent player in the Indian telecom sector, has demonstrated a dynamic financial performance over the past three financial years. The company, which operates extensively in the Rajasthan and North East Circles, has navigated through a highly competitive market landscape and the challenges posed by the COVID-19 pandemic.
Financial Year 2020-2021: A Year of Resilience
The financial year 2020-2021 was marked by the global disruption caused by the COVID-19 pandemic. Despite the challenges, Bharti Hexacom Limited reported a total income of INR 47,043 million. However, the company faced a loss before tax of INR 9,891 million and a subsequent loss after tax of INR 10,339 million. This period tested the company's resilience, prompting strategic measures to mitigate the impact of the pandemic on its operations.
Financial Year 2021-2022: Recovery and Growth
In the following year, Bharti Hexacom Limited witnessed a positive turnaround, with its revenue increasing to INR 54,940 million. The profit from operating activities before depreciation, amortization, finance cost, and exceptional items stood at INR 19,028 million. The company's efforts to grow market share and improve margins bore fruit, as reflected by a profit before tax of INR 18,411 million and a profit after tax of INR 16,746 million. This recovery signified the company's adaptability and commitment to growth amidst ongoing market pressures.
Financial Year 2022-2023: Sustained Momentum
The momentum continued into the financial year 2022-2023, with revenue growing by approximately 21.7% and EBITDA jumping by roughly 52%. The operating profitability improved significantly, with the EBITDA margin reaching 43.2%, up from 34.5% in the previous fiscal year. This performance underscores Bharti Hexacom Limited's robust operational efficiency and its ability to capitalize on market opportunities.
Looking Ahead: Bharti Hexacom Limited's Prospects
As Bharti Hexacom Limited moves forward, it is poised to leverage its strong market position and operational strengths. The company's focus on expanding its subscriber base, enhancing network capabilities, and delivering innovative services is expected to drive its financial performance in the coming years. With the telecom industry in India undergoing transformative changes, Bharti Hexacom Limited is strategically positioned to thrive and deliver value to its stakeholders.
In conclusion, Bharti Hexacom Limited's financial journey over the past three years highlights its resilience, recovery, and sustained growth. The company's ability to navigate through challenging times and emerge stronger is a testament to its strategic vision and operational excellence. Investors and market watchers will undoubtedly keep a close eye on Bharti Hexacom Limited as it continues to make strides in the competitive telecom landscape.