Unlisted shares of Bharti Hexacom Ltd are trading Rs 50 higher in the grey market, expecting an 8.77 per cent listing gain from the public issue
Bharti Hexacom IPO: The initial public offering of Bharti Airtel’s arm Bharti Hexacom Ltd, which is going to be closed on April 5, has been subscribed 2 times. Till 12:29 pm on the final day of bidding on Friday, the Rs 4,275-crore IPO received just 2.03 times subscription garnering bids for 8,35,62,440 shares as against 4,12,50,000 on offer.
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The category for non-institutional investors got subscribed 3.86 times while the portion for Retail Individual Investors (RIIs) attracted 1.70 times subscriptions. The QIB category received 1.22 times subscription.
The Bharti Hexacom IPO was opened for public subscription on April 3. Its share allotment will likely take place on April 8, while its listing take place on April 12 on both BSE and NSE.
The price band of the IPO has been fixed at Rs 542 to Rs 570 per share.
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Bharti Hexacom IPO GMP Today
According to market observers, unlisted shares of Bharti Hexacom Ltd are trading Rs 50 higher in the grey market as compared with its issue price. The Rs 50 grey market premium or GMP means the grey market is expecting an 8.77 per cent listing gain from the public issue. The GMP is based on market sentiments and keeps changing.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
Bharti Hexacom IPO: Should You Apply?
Assigning a ‘subscribe’ rating to the IPO, brokerage Geojit Securities said, “At the upper price band of Rs 570, BHL is available at a P/E of 51.9x (FY23), which appears to be fully priced. Given its strong parentage, leadership position, large customer base in key operating circles, high growth potential, rising ARPU, and expanding customer base, we assign a ‘Subscribe’ rating on a medium to long term basis.”
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Canara Bank Securities also grants a ‘subscribe’ rating to the IPO. It said, “The company’s top line increased at a CAGR of 19.5% from FY 21. The company’s ARPU for mobile services have increased by 18% which is better than peers. The company’s return ratios are also better. For FY23, ROE and
ROCE are 13.00% and 10.50%, respectively. For FY23, the EBIDTA and PAT margins are to be 43.90% and 8.2%, respectively which is in line with peers.”
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It said the company’s P/E is valued at 51.91x for FY23 and annualized P/E for FY2024 stands at 75.80x which is in line with peers. “We recommend to subscribe for listing gains.”
Another brokerage Mastertrust in its IPO note said investors looking to invest, “can invest in this IPO with a medium to long-term perspective”.
Bharti Hexacom IPO Details
This will mark the first public offering in the 2024-25 fiscal year. The company’s IPO is entirely an offer-for-sale (OFS) of 7.5 crore equity shares, indicating a 15 per cent stake by Telecommunications Consultants India Ltd, with no fresh issue component.
The minimum lot size for an application is 26 shares. The minimum amount of investment required by retail investors is Rs 14,820. The minimum lot size investment for small NII is 14 lots (364 shares), amounting to Rs 2,07,480, and for big NII, it is 68 lots (1,768 shares), amounting to Rs 10,07,760.
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Since it is an offer-for-sale or OFS, Bharti Hexacom will not receive any proceeds from the IPO. At present, promoter Bharti Airtel holds 70 per cent stake and the remaining 30 per cent stake is owned by Telecommunications Consultants India.
Bharti Hexacom provides telecommunication services in Rajasthan and the North East. At the upper-end of the price band, the IPO size will be Rs 4,275 crore. About 75 per cent of the issue size has been reserved for qualified institutional buyers (QIBs), 15 per cent for non-institutional investors and the remaining 10 per cent for retail investors.
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Bharti Hexacom, which filed its preliminary IPO papers with Sebi on January 20, obtained its nod on March 11, to float the maiden public issue. SBI Capital Markets, Axis Capital, BOB Capital Markets, ICICI Securities, and IIFL Securities are the book-running lead managers of the public issue.
