Airtel unit, Bharti Hexacom, gets Sebi approval to float IPO

Bharti Hexacom, owned by telecom major Bharti Airtel, has received approval from the Securities and Exchange Board of India (SEBI) to go ahead with its IPO plans.

The IPO comprises only an offer-for-sale (OFS) of 10 crore equity shares by the only public shareholder Telecommunications Consultants India, with no fresh issue component. This means the entire issue proceeds (excluding IPO expenses) will go to the selling shareholder.

According to the draft red herring prospectus (DRHP) filed by the communications solutions provider with the market regulator on January 19, promoter Bharti Airtel holds a 70 percent stake (35 crore equity shares) and the remaining 30 percent shareholding (equivalent to 15 crore equity shares) is held by non-promoter Telecommunications Consultants India.

The SEBI issued an observation letter on the IPO draft papers of the company on March 11. In SEBI parlance, the issuance of an observation letter means the company can launch its IPO within the next one-year period.

Bharti Hexacom, which offers consumer mobile services, fixed-line telephone and broadband services under the Airtel brand to customers in Rajasthan and the North East, recorded a net profit of Rs 549.2 crore in FY23, a decline of 67.2 percent compared to the previous year. Its profit in FY22 was supported by exceptional gains of Rs 1,951.1 crore. Revenue from operations remained strong rising 21.7 percent to Rs 6,579 crore.

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

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