Bharti Hexacom IPO: The IPO of Bharti Airtel's subsidiary Bharti Hexacom Ltd, which closes on April 5, suddenly received a huge response from investors. The IPO, which was struggling to get fully subscribed until Thursday, has now received about 30 times subscription. Till 3:39 pm on the last day of offering on Friday, the Rs 4,275-crore IPO received 28.69 times subscription bids for 1,18,35,92,228 shares against 4,12,50,000 in the offer.
The non-institutional investor category was subscribed 10.37 times while the retail investor section (RIIs) attracted 2.54 times subscriptions. The QIB category received 46.57x subscriptions.
Bharti Hexacom's IPO was opened for public subscription on April 3. The share allotment is expected to take place on April 8, while the listing will take place on April 12 on both the BSE and NSE.
The price range of the IPO has been set at Rs 542 to Rs 570 per share.
Bharti Hexacom IPO GMP today
According to market observers, unlisted shares of Bharti Hexacom Ltd are trading Rs 63 higher than their issue price in the gray market. The gray market premium or GMP of Rs 63 means the gray market expects a listing gain of 11.05 per cent from the public issue. The GMP is based on market sentiment and is constantly changing.
“Gray market premium” indicates investors’ willingness to pay more than the issue price.
Bharti Hexacom IPO: Should you apply?
Advertising
Brokerage firm Geojit Securities assigned a 'Subscribe' rating to the IPO and said, “At the upper price range of Rs 570, BHL is available at a P/E ratio of 51.9x (FY23), which appears to be fully priced in.” Given its strong pedigree, Leadership position, large customer base in key business circles, high growth potential, increasing ARPU and growing customer base, we assign a “Subscribe” rating in the medium to long term.
Canara Bank Securities also accorded the IPO a Subscribe rating. It said: “The company's revenue increased at a CAGR of 19.5% compared to FY21. The company's ARPU for mobile services has increased by 18%, which is better than competitors.” The company's return ratios are also better. For FY23, ROE and
The ROCE is 13.00% and 10.50% respectively. For FY23, EBIDTA and PAT margins are expected to be 43.90% and 8.2%, respectively, in line with competitors.”
It says that the company's FY23 P/E is valued at 51.91x and its annualized FY24 P/E is 75.80x, which is in line with its peers. “We encourage you to sign up for listing profits.”
Another brokerage firm, Mastertrust, said in its IPO announcement that investors who want to invest “can invest in this IPO with a medium to long-term perspective.”
Bharti Hexacom IPO details
This will be the first public offering in the 2024-25 financial year. The company's IPO is purely an offer for sale (OFS) of 7.5 crore shares, representing 15 per cent stake, by Telecommunications Consultants India Ltd, with no fresh issue component.
The minimum lot size for registration is 26 shares. The minimum investment amount required for retail investors is Rs 14,820. The minimum lot size investment for small NII is 14 lots (364 shares) which is Rs 2,07,480 and for large NII it is 68 lots (1,768 shares) which is Rs 10,07,760.
Since this is an offer for sale or OFS, Bharti Hexacom will not receive any proceeds from the IPO. Currently, the promoter Bharti Airtel holds 70 percent stake and the remaining 30 percent is owned by Telecommunications Consultants India.
Bharti Hexacom provides telecommunication services in Rajasthan and North East. At the upper end of the price range, the IPO size is Rs 4,275 crore. About 75 percent of the issue volume is reserved for qualified institutional buyers (QIBs), 15 percent for non-institutional investors and the remaining 10 percent for retail investors.
Bharti Hexacom, which had filed its preliminary IPO papers with Sebi on January 20, received approval to float its first public issue on March 11. SBI Capital Markets, Axis Capital, BOB Capital Markets, ICICI Securities and IIFL Securities are the underwriters of the public issue.
Mohammad HarisHaris is Deputy News Editor (Business) at news18.com. He writes on various topics…Read more
first published: April 05, 2024, 12:38 IST
Comments are closed.