Bharti Hexacom, a subsidiary of Bharti Airtel, is set to launch its initial public offering (IPO) in the primary market starting tomorrow, April 3. The subscription period for the IPO will last until April 5.
The broadband services provider has announced a price range of ₹542 to ₹570 per equity share, with a face value of ₹5. Allocation for the IPO is set at 75% for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs), and a maximum of 10% for retail investors.
The IPO consists solely of an offer-for-sale (OFS) without a fresh issue component. Telecommunications Consultants India, the exclusive selling shareholder, plans to divest 7.5 crore equity shares, equivalent to 15% of the OFS.
Here are five key considerations before investing in the Bharti Hexacom IPO:
- IPO Size: The IPO comprises only an offer-for-sale (OFS) with a total divestment of over ₹4,275 crore by Telecommunications Consultants India, representing 15% of the OFS.
- Key Risks: Risks associated with the IPO include dependence on mobile telephone services in specific regions, outstanding legal proceedings involving promoters, contingent liabilities, and potential revenue reduction due to regulatory constraints or pricing pressures.
- Grey Market Premium (GMP): The IPO is trading at a premium of ₹47 in the grey market, with estimates ranging from ₹30 to ₹65. The estimated listing price is ₹617, representing an 8.25% increase over the IPO price.
- Objective: The primary objective of the IPO is to carry out the offer-for-sale of equity shares by the selling shareholder and achieve the benefits of listing on stock exchanges.
- Promoters: Bharti Airtel Limited is the promoter of Bharti Hexacom, holding 70% of the pre-offer issued, subscribed, and paid-up equity share capital.
In summary, while the IPO presents investment opportunities, investors should carefully evaluate the risks and objectives before making investment decisions.
