Bharti Hexacom has filed a draft red herring prospectus (DHRP) with the Securities and Exchange Board of India (SEBI) on Jan 19, 2024, to proceed with the IPO (initial public offering) plans. The Indian government wants to offload its stake in the company. For the unaware, Bharti Airtel owns a 70% stake in the company while the remaining 30% is owned by Telecommunications Consultants India, a govt company. Note that this IPO won't contain any fresh issue of shares, so Bharti Hexacom won't get fresh capital. It is only that Telecommunications Consultants India wants to sell its stake.
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"We wish to inform you that Board of Directors of the Company at its meeting held on Friday, January 19, 2024 have approved the IPO of equity shares of face value Rs 5 each ("Equity Shares") comprising of an Offer for Sale ("OFS") of up to 100,000,000 Equity Shares (representing 20% of the paid-up share capital of the Company) (the "Offer") by Telecommunications Consultants India Limited, subject to such variation as permitted under applicable law," said Bharti Airtel in an exchange filing at the National Stock Exchange (NSE).
Out of the 30% stake in the company, the government wants to offload 20% of its stake.
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As mentioned, the company won't receive any proceeds from the IPO. It is only an Offer for Sale (OFS). Bharti Hexacom operates its mobile services in the Northeast and Rajasthan circles in the country. Bharti Airtel will still be a majority stakeholder post the sale of shares. According to an ET report, Bharti Hexacom's average revenue per user (ARPU) of Rs 135 in FY21 has jumped to Rs 195 during the six months ended September 2023.
"The IPO shall not have any fresh issuance of Equity Shares and will be undertaken subject to requisite approvals and market conditions. Being an OFS, the company will not receive any proceeds from the IPO," said the filing.
