About the Company:
Bharti Hexacom Ltd is a communications solutions provider offering consumer mobile services, fixed-line telephone and broadband services to customers.
Company operates in Rajasthan and the North East telecommunication circles in India, which comprises the states of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland and Tripura.
Company offers services under the brand ‘Airtel’.
As of December 31, 2023, Company had invested Rs. 206 billion in capital expenditure in our future ready digital infrastructure. Company derives significant synergies from our relationship with our Promoter, Airtel, through the expansive digital infrastructure, digital experience and the digital services it provides to its customers.
Company’s revenue market share for the Rajasthan circle was 39.5%, while for the North East circle was 52.5% during Fiscals 2023.
Company is at number one position in the North East circle and second position in the Rajasthan circle.
As of December 31, 2023, Company was present in 486 census towns and had an aggregate of 27.1 million customers across both the circles.
Company has been able to consistently increase ARPU (Average Revenue Per User) for mobile services from Rs.135 for Fiscal 2021 to Rs.155 for Fiscal 2022 to Rs. 185 for Fiscal 2023 to Rs.197 for the nine months ended December 31, 2023.
Details of major Shareholders of the Company:
Company’s Promoter Background (Airtel):
Company was originally incorporated in 1995 as ‘Hexacom India Limited’. In 2004, name of the Company was changed to ‘Bharti Hexacom Limited’ when Airtel acquired a majority equity interest in the Company. Airtel owns 70% of our outstanding equity share capital.
Airtel is a global communications solutions provider with over 500 million customers in 17 countries across South Asia and Africa.
It is among the top global mobile operators in terms of number of customers and is India’s largest integrated communications solutions provider in terms of consolidated operating revenue as of Fiscal 2023.
Airtel’s retail portfolio includes mobile services, fixed-line telephone, broadband services and Digital TV services.
Company’s Promoter Background (TCIL ):
The Government of India through Telecommunications Consultants India Limited (“TCIL”) owns 30% of our outstanding equity share capital.
TCIL is an engineering and consultancy company and was set up in 1978 for providing Indian telecom expertise in all fields of telecom and information technology to developing countries around the world.
Its core competence is in the fields of switching, cellular services, rural telecommunication, optical fibre based, information technology and networking solutions, e-Governance, 4G/5G, FTTH, VOIP, Wi-Fi surveillance, cyber security and civil construction and project management consultancy services.
Company’s Customer market share has grown consistently:
Company’s customer market share has grown consistently in Rajasthan from 33.1% as of March 31, 2021 to 35.0% as of December 31, 2023 and in the North East from 43.6% to 49.8% between the same dates.
Total Telecom customers in Rajasthan:
Company’s Network Infrastructure:
Company relies on a robust network infrastructure with a mix of owned and leased assets. As of December 31, 2023, Company utilized 24,874 network towers, of which company owned 5,092 towers, and the remaining 19,782 towers were leased from tower companies.
Company’s Distribution Network:
Company has an extensive distribution and service network across the regions we operate and have set up 51 retail outlets and 24 small format stores to reach 90 cities, as of December 31, 2023.
Company has a distribution network comprised 616 distributors and 89,454 retail touchpoints.
Management Team:
- Mr. Jagdish Saksena Deepak (Designation: Chairperson and Non-Executive Director)
- Mr. Devendra Khanna (Designation: Non-Executive Director)
Objectives of the Issue:
Offer For Sale: (Rs. 4275 cr)
- Company will not receive any proceeds from the Offer for Sale. The Selling Shareholders will be entitled to their respective portion of proceeds of the Offer for Sale.
Positives for the Company:
Established Leadership and Large Customer Base.
- Company provides consumer mobile services, fixed-line telephone and broadband services to customers in Rajasthan and in the North East telecommunication circles in India, which comprises the states of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland and Tripura.
- As of December 31, 2023, Company is present in 486 census towns and had an aggregate of 27.1 million customers. As of the same date, Company’s customer base included 19,144 thousand data customers, of which 18,839 thousand were 4G and 5G customers.
Financials of the Company:
| (in Crores) | FY 21 | FY 22 | FY 23 | Upto 30th Sept 23 |
|---|---|---|---|---|
| Revenue | 4704.3 | 5494.0 | 6719.2 | 5420.8 |
| Net Profit | (-1033.9) | 1674.6 | 549.2 | 281.8 |
Valuation of Peer Group Companies:
| Company Name | Face Value | EPS | PE Ratio | RoNW | NAV |
|---|---|---|---|---|---|
| Bharti Hexacom Ltd | 5 | 10.98 | 51.91 | 13.83% | 84.19 |
| Bharti Airtel Ltd | 5 | 14.57 | 82.16 | 15.84% | 136.72 |
| Vodafone Idea Ltd | 10 | (8.43) | (1.63) | N.A | (15.28) |
| Reliance Jio Infocomm Ltd | 10 | 1.07 | N.A | 8.43% | 48.00 |
IPO Details:
| Details | Info |
|---|---|
| Issue Opens on | 3rd April 2024 |
| Issue Closes on | 5th April 2024 |
| Issue Price | Rs.542 – 570 |
| Face Value | Rs. 5 |
| Retail Category Allocation | 10 % |
| Minimum Lot | 26 Shares |
| Minimum Investment | Rs.14,820 |
| Issue Constitutes | 15 % |
| Issue Size | Rs.4275 cr ($515 million ) |
| Market Cap | Rs.28500 cr ($ 3.4 billion ) |
| Listing at | NSE & BSE |
| Equity Shares Offered (OFS) | 7,50,00,000 (Rs.4275 cr) |
| Equity Shares Prior to the Issue | 50,00,00,000 |
| Equity Shares after the Issue | 50,00,00,000 |
Important Dates:
| Finalization of Basis of Allotment | on or Before 8th April 2024 |
| Initiation of Refunds | on or Before 10th April 2024 |
| Credit of Equity Shares: | on or Before 10th April 2024 |
| Listing Date: | on or Before 12th April 2024 |
IPO Valuation Parameters:
| Earnings Per Share (EPS) | Price To Earnings ratio (PE) | Return on Net Worth (RoNW) | Net Asset Value (NAV) |
|---|---|---|---|
| 10.98 | 51.91 | 13.83% | 84.19 |
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| Should You Subscribe or Not ? (Markets Guruji’s View) |
|---|
| Bharti Hexacom Ltd is a leading communications solutions provider, catering to consumer mobile services, fixed-line telephone, and broadband services. Operating primarily in Rajasthan and the North East telecommunication circles in India, encompassing states such as Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura, the company has established itself as a crucial player in these regions.
However, with the aggressive marketing strategies of competitors like Reliance Jio, the competitive landscape is becoming increasingly challenging. Reliance Jio’s robust presence in the market poses a significant threat to Bharti Hexacom’s market share and profitability in both Rajasthan and the North East. Additionally, considering the fully priced nature of Bharti Hexacom’s initial public offering (IPO), potential investors might find it prudent to exercise caution. Given the intensified competition and the pricing dynamics of the IPO, investors may opt to skip this offering until there’s greater clarity on the company’s ability to navigate the competitive pressures and deliver sustained growth and returns. In summary, while Bharti Hexacom holds a significant position in its operating regions, the fierce competition and the fully priced IPO warrant careful consideration for investors contemplating participation in the company’s public offering. |
| Company Contact Info: |
|---|
| Bharti Hexacom Limited Bharti Crescent 1, Nelson Mandela Road Vasant Kunj, Phase-II New Delhi, 110 070, India. Telephone: 011-46666100, Email: bhartihexacom@bharti.in Website: www.bhartihexacom.in |
| Registrar to the Issue: |
|---|
| Kfin Technologies Limited Selenium, Tower B, Plot No. 31 and 32, Financial District Nanakramguda, Serilingampally Hyderabad 500 032, Telangana, India Telephone: +91 40 6716 2222 E-mail: bhl.ipo@kfintech.com Website: www.kfintech.com |
| Check IPO Allotment Status: |
|---|
KfinTech Website (Click on the below Link)http://kfintech/IPO/Allotment_Status |
| Find the List of Upcoming IPOs in India: |
|---|
Upcoming IPOs in India (Click on the below Link)https://www.marketsguruji.com/upcoming-ipos-in-india/ |
