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  • Writer's pictureJatin Agarwal

Is Bharti Hexacom IPO a Lucrative Investment Opportunity?

Updated: Mar 31

Bharti Hexacom IPO: Unveiling the Future of Telecommunications


Company Overview

Bharti Hexacom Limited, incorporated in 1995, is a notable player in the telecommunications sector, offering fixed-line telephone and broadband services primarily in the Rajasthan and North Eastern telecom circles of India. As of December 31, 2023, Bharti Hexacom boasts a strong customer base of 27.1 million across 486 census towns. With a robust distribution network comprising 616 distributors and 89,454 retail touchpoints, and significant investments amounting to ₹206 billion in digital infrastructure, the company aims to be future-ready. The company's services span across several states including Rajasthan, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura, highlighting its extensive reach in the telecommunications domain.


Company Financials

  • Revenue and Profitability: For the period ending December 31, 2023, Bharti Hexacom reported a revenue of ₹5,420.80 crore, with a profit after tax (PAT) of ₹281.80 crore. This represents a revenue increase of 22.3% but a drop in PAT by -67.2% for the fiscal year ending March 31, 2023, compared to the previous year.

  • Assets and Net Worth: The company's assets stood at ₹19,603.00 crore as of December 31, 2023, with a net worth of ₹3,978.80 crore.

  • Borrowings: Total borrowing as of the latest report was ₹6,253.00 crore.


SWOT Analysis

  • Strengths: Strong parentage of Bharti Airtel Limited, leading market position in the telecom circles it operates, and substantial investments in digital infrastructure.

  • Weaknesses: One-time accounting adjustments impacting net profits and high competition in the telecom sector.

  • Opportunities: Expansion into new markets and potential for increased broadband and 4G/5G penetration.

  • Threats: Regulatory changes, technological advancements by competitors, and market saturation in telecom services.


IPO Overview

The Bharti Hexacom IPO is set to open for subscription on April 3, 2024, and will close on April 5, 2024. The IPO consists of an offer for sale (OFS) of 75,000,000 shares, aggregating up to ₹4,275.00 crore.


IPO Details

  • IPO Date: April 3-5, 2024

  • Face Value: ₹5 per share

  • Price Band: ₹542 to ₹570 per share

  • Lot Size: 26 Shares

  • Total Issue Size: 75,000,000 shares (aggregating up to ₹4,275.00 Cr)

  • Listing on: BSE, NSE

  • Book Running Lead Managers: SBI Capital Markets Limited, Axis Capital Limited, Bob Capital Markets Limited, ICICI Securities Limited, and Iifl Securities Ltd

  • Registrar: Kfin Technologies Limited


Objectives of the Issue

The primary objectives of the IPO are to carry out the offer for sale of up to 75,000,000 equity shares by the selling shareholder and to achieve the benefits of listing the equity shares on the stock exchanges.


Conclusion

Bharti Hexacom's IPO, backed by the strong parentage of Bharti Airtel and its leadership in its operational telecom circles, presents an interesting opportunity for investors. However, potential investors are advised to carefully consider the company's financials, the IPO's pricing, and the broader market conditions before making investment decisions. As always, consulting with a financial advisor is recommended.


Disclaimer: All information is provided for educational and informational purposes only. Data is fetched from publicly available sources such as the DRHP filed by the company and other reliable sources. Please consult a financial advisor or do your own analysis before investing/trading in the stock market.

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