SEBI Provided Approval to Airtel’s Subsidiary Bharti Hexacom to Float IPO

Bharti Airtel’s subsidiary, Bharti Hexacom, has received the green light from the market regulator, the Securities and Exchange Board of India (SEBI), to launch an initial public offering (IPO). This move indicates Airtel’s intent to expand its presence in the Indian stock market.

IPO Details

The key takeaway is that Bharti Hexacom IPO will be an Offer for Sale (OFS) – existing shareholders will be offloading their stocks. Telecommunications Consultants India Ltd (TCIL), which currently holds a 30% stake in Bharti Hexacom, will be selling 10 crore (100 million) equity shares. It’s important to note that Bharti Hexacom itself won’t raise any fresh capital through this IPO.

Bharti Hexacom: A Regional Telecom Player

Bharti Hexacom Limited was originally incorporated in 1995 as ‘Hexacom India Limited’. In 2004, the company’s name was changed to ‘Bharti Hexacom Limited’ when Airtel acquired a majority equity interest in the company. Airtel owns 70% of its outstanding equity share capital as of DRHP, dated January 19, 2024. Bharti Hexacom provides telecommunication services in specific regions of India, such as Rajasthan and the northeast. This IPO could be a strategic move by Airtel to unlock the value of this regional player and potentially raise funds for TCIL.

The company relies on a robust network infrastructure with a mix of owned and leased assets. As of September 30, 2023, the company had 23,748 network towers. Out of these, the company owns 5,005 towers. The company operates a spectrum portfolio with a varied pool of mid-band spectrum (1800/2100/2300 MHz bands), which has enabled us to offer 5G Plus services on the widely

chosen non-standalone network architecture and at a low cost of ownership.

Airtel’s Continued Growth

This development comes amidst Airtel’s ongoing growth trajectory in the Indian telecom sector. The company has been fiercely competing with Reliance Jio for market share, and this IPO could be a way to strengthen its financial position further.

What to Watch Out For?

While the SEBI approval is a significant step, there’s no confirmed timeline for the IPO launch yet. Investors interested in Bharti Hexacom will need to wait for further announcements regarding the IPO date, price band, and other details.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.