Bharti Hexacom shares list at 32% premium over issue price

Shares of Bharti Hexacom listed on the exchanges on Friday at a premium of 32.45%. The stock debuted at Rs 755.2 on BSE and Rs 755 on the NSE as compared to the offer price of Rs 570.

Ahead of the listing, the company's shares traded at a premium of Rs 60 in the unlisted market.

Since the IPO was completely an offer for sale (OFS), the entire proceeds will go to the selling shareholder TCIL. The issue, through which TCIL offloaded its stake, was booked nearly 30 times at close on strong interest from non-institutional investors.

Analysts said a healthy listing around 10-12% is justified due to a great opportunity for long-term investors to hold mid-cap telecommunications solutions providers and to play long-term India’s telecom structural ARPU growth story.

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Furthermore, Bharti Hexacom’s anchor book showcases top global investors such as Capital Group, Fidelity, Blackrock, and ADIA participating which gives all other investors more comfort to block money for the long term.

Bharti Hexacom is a communications solutions provider offering consumer mobile services,fixed-line telephone, and broadband services to customers in the Rajasthan and the North East telecommunication circles in India, which comprises the states of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland and Tripura.

The company has a spectrum portfolio with a varied pool of mid-band spectrum, which has enabled us to offer 5G plus services to customers.

Sunil Mittal-driven telco Bharti Airtel holds a 70% stake or 35 crore shares in the company.

For the six months ended September, Bharti Hexacom reported a revenue of Rs 3,420 crore, compared to Rs 3,167 crore a year ago. However, profit dropped to Rs 69 crore from Rs 195 crore a year ago.

The company's topline has grown at a CAGR of 19.51% between FY21-23.

From an average revenue per user (ARPU) of Rs 135 in FY21, Bharti Hexacom has managed to improve this to Rs 195 during the six months ended September 2023. As of September 2023, the company had an aggregate of 29.1 million customers across both circles.

SBI Capital Markets, Axis Capital, BOB Capital Markets, ICICI Securities, and IIFL Securities acted as the book-running lead managers to the issue.