Bharti Hexacom’s IPO Debut Sees Cautious Response

The debut of Bharti Hexacom’s initial public offering (IPO) encountered a lukewarm reception from investors in the opening hours of bidding on its first day. The New Delhi-based company’s IPO, which began on Wednesday, April 3, witnessed limited participation across investor categories. Bharti Hexacom aims to raise Rs 4,275 crore through the IPO, offering 7,50,00,000 equity shares at a price band of Rs 542-570 per share, with a minimum application of 26 shares.

Data reveals that by 1:35 pm on April 3, investors had bid for only 11% of the offered shares, totaling 44,67,580 equity shares out of the 4,12,50,000 shares on offer. Notably, retail investors subscribed to 30% of their allocated shares, while non-institutional investors showed a subdued interest with only 10% subscriptions. The portion earmarked for qualified institutional bidders (QIBs) garnered bids for merely five percent of the reserved shares by the same time.

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Bharti Hexacom’s IPO Outlook and Financial Snapshot Ahead of Listing

Bharti Hexacom, established in 1995, operates in the fixed-line telephone and broadband services sector, primarily serving customers in Rajasthan and North East telecom circles. Despite its solid brand presence and robust financials, concerns persist regarding geographic concentration, reliance on third-party infrastructure, and competitive pressures in the industry.

The IPO has generated mixed opinions among brokerage firms, with some recommending subscription based on the company’s strong fundamentals, while others remain cautious due to fully priced valuations and the IPO’s offer-for-sale (OFS) nature.

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Strong Anchor Investor Support and IPO Allocation Strategy

Ahead of the IPO, Bharti Hexacom secured Rs 1,924 crore from anchor investors by allocating 3,37,50,000 shares at Rs 565 each. The IPO distribution plan reserves 75% of the offering for qualified institutional investors (QIBs), 15% for non-institutional investors (NIIs), and 10% for retail investors.

Bharti Hexacom reported a net profit of Rs 281.80 crore on a revenue of Rs 5,420.80 crore for the nine months ended December 31, 2023, indicating a promising financial performance. The company’s shares are anticipated to be listed on both BSE and NSE on April 10, 2024, with Axis Capital, SBI Capital Markets, BoB Capital Markets, ICICI Securities, and IIFL Securities serving as book running lead managers and Kfin Technologies as the registrar for the IPO.