Government may sell its 15% stake in Bharti Hexacom

22 Apr 2024 , 03:05 PM

The proceeds of Bharti Hexacom’s first initial public offering (IPO) would be distributed as a special dividend by Telecom Consultants India Limited (TCIL). TCIL is a government undertaking that sold some of its stake in the Bharti Hexacom IPO. It is also likely to  sell its remaining 15% stake in the company, according to reports.

“The IPO of Bharti Hexacom Limited (BHL) has raised ₹4,275 Crore from the sale of 15% of TCIL’s equity. According to the company’s act, taxes and expenses will be deducted before the profits of the initial public offering (IPO) are distributed as a special dividend, as stated by Sanjeev Kumar, Chairman of TCIL, in an interview with ETTelecom.

Following the public offering earlier this month, Bharti Hexacom, a division of Sunil Mittal-led Bharti Airtel, finished allocating shares to investors last week.

There was a tremendous response from qualified institutional investors (QIB), and the portion was 48.57 times oversubscribed.

Investors have demonstrated faith in the telecom industry’s remarkable expansion. The correct balance between issue size and pricing can draw in investors and yield higher profits, according to Kumar.

Analysts claim that the Ministry of Communications’ plan to sell the Bharti Hexacom share in phases was successful and will bring in a sizable sum of money for the government.

The Bombay Stock Exchange (BSE) saw trading of Bharti Hexacom’s shares on Friday at prices exceeding ₹950.

The remaining 15% of the share, if assessed at the present price, may bring in more than ₹7,000 Crore, bringing the total to around ₹11,500 Crore. This amount exceeds the ₹9,500 Crore that the government had anticipated from the IPO.

Following the Department of Investment and Public Asset Management (Dipam) approval, the state-owned company may sell the remaining 15% stake in further three chunks of 5% each, to maximise earnings.

After the six-month lock-in period and the required regulatory permissions, the next chunk will be made publicly available.

According to the senior official, TCIL, a state-run telecom and engineering company, is anticipated to see remarkable revenue growth in FY 2024–25, surpassing the revenue of roughly ₹2,500 Crores in FY 2023–24.

The remaining 30% of Bharti Hexacom’s equity shares, or 35 Crore shares, are held by non-promoter TCIL, who sold 7.5 Crore shares for ₹4,275 Crore. Bharti Airtel owns 70% of Bharti Hexacom.

Customers in Rajasthan and the Northeast can get consumer mobile, fixed-line, and broadband services from Bharti Hexacom under the Airtel brand.

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