Bharti Hexacom a subsidiary of Airtel gets Sebi nod to launch IPO

Bharti Hexacom, a subsidiary of telecom giant Bharti Airtel, has been granted approval by the Securities and Exchange Board of India (SEBI) to proceed with its initial public offering (IPO) plans.

The IPO will solely consist of an offer-for-sale (OFS) of 10 crore equity shares by Telecommunications Consultants India, the only public shareholder. There will be no fresh issue component, meaning all proceeds from the IPO (excluding expenses) will go to the selling shareholder.

As per the draft red herring prospectus (DRHP) filed by Bharti Hexacom, Bharti Airtel holds a 70 percent stake (35 crore equity shares), while the remaining 30 percent (15 crore equity shares) is held by non-promoter Telecommunications Consultants India.

The SEBI issued an observation letter on March 11, indicating that the company can launch its IPO within the next one-year period.

Bharti Hexacom offers consumer mobile services, fixed-line telephone, and broadband services under the Airtel brand in Rajasthan and the North East regions. In FY23, it recorded a net profit of Rs 549.2 crore, marking a 67.2 percent decline compared to the previous year, which had exceptional gains of Rs 1,951.1 crore. However, revenue from operations saw a robust increase of 21.7 percent to Rs 6,579 crore.

For the six-month period ending September FY24, net profit dropped by 64.6 percent year-on-year to Rs 69.1 crore, impacted by higher tax costs and exceptional loss, while revenue during the same period grew by 8 percent to Rs 3,420.2 crore.

The book-running lead managers for the IPO include SBI Capital Markets, Axis Capital, BOB Capital Markets, ICICI Securities, and IIFL Securities.

This development signals a significant milestone for Bharti Hexacom as it moves towards accessing the capital markets for further growth opportunities.