Bharti Hexacom Limited IPO Subscribed 30 Times on Last Day
Bharti Hexacom Limited's initial public offering (IPO) concluded on Friday, receiving nearly 30 times subscriptions in total.
The communication solutions provider's initial public offering (IPO) attracted a lot of interest from investors during its three days of availability for subscription on April 3, 2024.
BSE data shows that out of the 4,12,50,000 equity shares offered, a total of 1,23,24,80,626 bids were made. There were 29.88 subscriptions to the issue. The New Delhi-based company sold its shares for between Rs 542-570 each.
As of the most recent report on the final day of the IPO, 29.88 subscriptions had been made. Subscriptions were 2.83 times higher in the retail sector. Qualified Institutional Buyers (QIB) subscribed 48.57 times, while Non-Institutional Investors (NII) subscribed 10.52 times.
Bharti Hexacom Limited, a subsidiary of Bharti Airtel, is a significant player in the Indian telecommunications sector. The company's journey began in 1995 under the name 'Hexacom India Limited' and was later rebranded to Bharti Hexacom Limited after Bharti Airtel acquired a majority equity interest in 2004.
The company is part of the Bharti Enterprises group, founded by Sunil Bharti Mittal. Under his leadership, Bharti Enterprises has grown into one of India's leading business conglomerates, with interests in telecom, insurance, real estate, education, malls, hospitality, agri-business, and food. Sunil Bharti Mittal's vision and entrepreneurial spirit have been the driving force behind the group's success.
Originally incorporated in Delhi, the national capital territory of India, Bharti Hexacom has expanded its operations significantly. The company provides mobile services, fixed-line telephone, and broadband services, primarily in the Rajasthan and North East regions, covering states like Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura.
The inception of Bharti Hexacom was driven by the need to provide quality telecommunication services in regions that were underserved at the time. The company aimed to bridge the digital divide and enhance connectivity in these areas, fostering growth and development. This mission aligned with the broader vision of Bharti Enterprises to create a transformative impact on society through innovation in telecommunications.
The rationale behind starting Bharti Hexacom was to tap into the potential of the burgeoning telecom market in India, especially in regions that lacked adequate services. By offering reliable and affordable communication solutions, Bharti Hexacom aimed to empower individuals and businesses in these areas, contributing to the overall economic progress of the country.
Today, Bharti Hexacom continues to thrive as a testament to the foresight of its founders and the enduring commitment to connecting people across India. With a robust infrastructure and a customer-centric approach, the company is well-positioned to navigate the dynamic landscape of the telecommunications industry. As it moves forward, Bharti Hexacom remains dedicated to innovation, quality, and inclusivity, ensuring that it remains at the forefront of India's digital revolution.
Bharti Hexacom Limited, a subsidiary of Bharti Airtel, operates in the dynamic telecom sector of India, specifically within the Rajasthan and North East telecommunication circles. As a communications solutions provider, it offers a range of services including consumer mobile services, fixed-line telephone, and broadband services. The company has carved a niche for itself by focusing on these specific regions, catering to a substantial customer base with tailored services that address the unique needs of these areas. With a strategic emphasis on acquiring and retaining high-value customers, Bharti Hexacom has established a robust market position. This is evidenced by its large customer base of approximately 2.91 crore as of September 30, 2023, and its recent decision to go public, which is expected to value the company at over ₹28,000 crore. The IPO is a significant step for Bharti Hexacom, indicating its growth trajectory and the confidence of its stakeholders in its business model and future prospects.
Bharti Hexacom IPO GMP
As of April 5, 2024, the Grey Market Premium (GMP) for Bharti Hexacom Limited's first public offering (IPO) is Rs. 71.
Accordingly, it is anticipated that the shares would list for Rs. 641, which is 12.46% more than the top price range of Rs. 570.
Bharti Hexacom Limited, a prominent player in the Indian telecom sector, has demonstrated a robust financial performance in recent years. For the fiscal year ending March 31, 2022, the company reported a significant increase in revenue, amounting to Rs. 54,940 Million, compared to Rs. 47,043 Million in the previous fiscal year. This revenue growth can be attributed to the company's diversified service offerings, including mobile, voice, and data solutions, which have resonated well with the consumer base in Rajasthan and North East Circles, where it operates as one of the largest mobile service providers.
In terms of profit, Bharti Hexacom Limited has also shown remarkable performance. The net profit for the quarter ending December 2023 saw a 39.84% increase to Rs 212.70 crore from Rs 152.10 crore in the corresponding quarter of the previous year. Sales during this quarter rose by 7.21% to Rs 1800.60 crore, up from Rs 1679.50 crore in the previous quarter ended December 2022. These figures indicate a strong upward trajectory in the company's profitability, showcasing its ability to capitalize on market opportunities and maintain growth momentum.
Furthermore, the company's full-year revenue for FY23 stood at Rs 6,579 crore, marking a 22% increase on an annual basis. The net profit reported at the end of September 2023 was Rs 69.1 crore, compared with Rs 195.2 crore in the six months ended September 2022.
Conclusion
In conclusion, the Bharti Hexacom Limited IPO presents a significant event in the telecommunications sector, reflecting the company's growth trajectory and future potential. With a substantial issue size and a strategic price band, the IPO has garnered attention from various investor segments, including QIBs, NIIs, and retail investors. The company's decision to reduce the issue size and the subsequent grey market premium indicate a nuanced market perception. As the IPO date approaches, potential investors are advised to consider the company's financial performance, market position, and the broader economic context. Bharti Hexacom's journey from a regional player to a participant in the national market is a testament to its operational strengths and strategic initiatives. The IPO not only offers an opportunity for the company to raise capital but also allows investors to be part of Bharti Hexacom's evolving story in the Indian telecom landscape.
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FAQs
Q: What is an IPO?
An Initial Public Offering (IPO) is the first time a company offers its shares for sale to the public on a stock exchange. This allows the company to raise capital for growth and expansion.
Q: How can I apply for an IPO?
There are two main ways to apply for an IPO:
Retail Investor: You can apply through your trading broker using a Demat account and ASBA facility (explained below).
Institutional Investor: Large investors like banks and mutual funds have a separate application process.
Q: What is ASBA?
ASBA (Application Supported by Blocked Amount) is a safe and convenient method to apply for IPOs. With ASBA, the funds you bid for the IPO are blocked in your bank account and only debited if your bid is successful. This prevents unsuccessful applicants' money from being tied up.
Q: What is the difference between a fixed-price and a book-building IPO?
Fixed-Price IPO: The company sets a fixed price for the shares offered in the IPO.
Book-Building IPO: The price of the shares is determined based on investor demand during a bidding process.
Q: What are the risks involved in investing in IPOs?
New companies: IPOs often involve young companies with limited track records, so there's a higher risk of their stock price being volatile.
Overvaluation: Some IPOs can be overvalued, leading to a potential drop in share price after listing.
Q: How much should I invest in an IPO?
IPO investments should be a part of a diversified portfolio. Only invest what you can afford to lose, considering the inherent risks involved.
Q: What happens after I apply for an IPO?
The company allocates shares based on the bids received. You will be notified if your application is successful or not. The shares will then be credited to your Demat account after the listing date.
Q: When should I sell my IPO shares?
This is a personal decision based on your investment goals and risk tolerance. Some investors hold for the long term, while others may sell soon after listing to capture potential gains.
Q: Where can I find information about upcoming IPOs?
Many financial websites and brokerage firms provide information on upcoming IPOs, including issue details, timelines, and prospectuses.
Q: What are the tax implications of investing in IPOs?
Short-term capital gains tax applies to IPO shares sold within one year of purchase. Long-term capital gains tax applies if held for over a year, and the rates may vary depending on the country's tax regulations.