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Business News/ Markets / Ipo/  Bharti Hexacom IPO Day 3: Should you apply or not? Check GMP, key dates, subscription status, more.
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Bharti Hexacom IPO Day 3: Should you apply or not? Check GMP, key dates, subscription status, more.

Bharti Hexacom IPO subscription status was strong with high enthusiasm from retail and non-institutional investors. Analysts recommend subscribing to issue for the long term due to the company's strong market presence in North East Circles and Rajasthan.

Bharti Hexacom IPO date has been scheduled for subscription from Wednesday, April 3, and will close on Friday, April 5. (https://www.bhartihexacom.in/)Premium
Bharti Hexacom IPO date has been scheduled for subscription from Wednesday, April 3, and will close on Friday, April 5. (https://www.bhartihexacom.in/)

Bharti Hexacom IPO buy or not? With full subscription numbers, the Bharti Hexacom IPO breezed through the second day of bidding. Bharti Hexacom IPO subscription status was booked 1.12 times, as per BSE data. Retail investors (1.15 times) and non-institutional investors (NIIs, 1.71 times) responded with great enthusiasm on day two of the issue. The qualified institutional buyers (QIBs) portion fetched 82%.

On the first day of subscription, the issue was booked 34%. NII part was booked at 36%, while the retail portion was subscribed at 48%. The QIBs portion was booked 29%.

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Also Read: Bharti Hexacom IPO receives lukewarm response on Day 1, issue booked 34%; check latest GMP

The subscription period for the Bharti HexacomIPO will end today, Friday, April 5. The issue opened for subscription on Wednesday, April 3. The Bharti Hexacom IPO price band has been fixed in the range of 542 to 570 apiece of the face value of 5. The subsidiary of Bharti Aitel received 1,924 crore from anchor investors on Tuesday. A Bharti Hexacom IPO lot consists of 26 equity shares.

Not less than 75% of the offer has been reserved for QIB, maximum 15% of the offer has been set aside for NII, and maximum 10% of the offer has been put aside for retail investors.

Also Read: Bharti Hexacom IPO opens today: GMP, subscription status, review, other key details. Should you subscribe or not?

Bharti Hexacom IPO details.
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Bharti Hexacom IPO details.

In the Indian regions of Rajasthan and the Northeast, Bharti Hexacom offers internet, fixed-line phone, and mobile services to its clientele. Operating under the "Airtel" name, it has 5,092 owned and 19,782 leased network towers spread among 486 towns in the two rings it serves.

Bharti Airtel owns 70% of the company, while the government of India controls the other 30%. Bharti Airtel is a pan-Indian and international player, which sets it apart from its arm. Bharti Hexacom is a company that operates solely in Rajasthan and six other northeastern states, except Assam. Arun Kejriwal, the founder of Kejriwal Research and Investment Services, highlighted that there are important distinctions between this company and Bharti Airtel.

However, the business model is moreover similar. On the valuation front, if we look at the P/E multiple and the other factors, this is roughly a 12–15% discount to the Bharati Airtel price. A reasonable discount of between 12 and 15 percent is therefore what you should anticipate. Furthermore, Bharti Airtel's quote is at an all-time high. A share that is now at a lifetime high suggests that there has been some performance; otherwise, it would not be at such a high level. According to Kejriwal, this is the main distinction.

The company's listed peers, according to the Red Herring Prospectus (RHP), include Bharti Airtel Ltd. (P/E of 82.16), Vodafone Idea Ltd. (P/E of (1.63), and Reliance Jio Infocomm Ltd.

Also Read: Bharti Hexacom IPO: Planning to buy? Know 10 key risks involved before subscribing

Bharti Hexacom IPO Subscription Status 

In a flat market on Friday, the Bharti Hexacom IPO received steady subscription numbers on Day 3. 

The overall Bharti Hexacom IPO subscription status is 29.88 times, as per BSE data. The retail portion has been subscribed 2.83 times, and non-institutional investors (NII) portion has been booked 10.52 times. The qualified institutional buyers (QIBs) portion was booked 48.57 times.

Bharti Hexacom IPO has received bids for 1,23,24,80,470 shares against 4,12,50,000 shares on offer, according to data from the BSE.

The retail investors' segment received bids for 2,12,46,758 shares against 75,00,000 shares on offer for this segment.

The NIIs portion got bids for 11,83,08,372 shares against 1,12,50,000 on offer for this segment.

The QIBs segment got bids for 1,09,29,25,340 shares against 2,25,00,000 on offer for this segment.

Also Read: Bharti Hexacom IPO booked over 29 times on the last day of bidding process led by QIBs, NIIs. Check latest GMP

Bharti Hexacom IPO details

The Red Herring Prospectus of the firm states that the Bharti Hexacom IPO consists only of an offer-for-sale (OFS) and does not include a fresh issue component. Telecommunications Consultants India, the company's sole selling shareholder intends to sell off 7.5 crore equity shares, or 15% of the OFS.

The government-owned Telecommunications Consultants had planned to issue up to 10 crore equity shares, according to the company's draft red herring prospectus (DRHP).

Axis Capital Limited, Bob Capital Markets Limited, ICICI Securities Limited, SBI Capital Markets Limited, and IIFL Securities Ltd are the book running lead managers of the Bharti Hexacom IPO. The company Kfin Technologies Limited is the issue registrar.

Also Read: Bharti Hexacom IPO: From price band to GMP, here are 10 things to know before subscribing to the issue

Bharti Hexacom IPO apply or not?

Nirmal Bang Securities Pvt Ltd

The brokerage claims that Bharti Hexacom is leading the market in North East Circles and has created a notable presence in Rajasthan. Average revenue per user (ARPU) increased by the firm from Rs. 135 in FY21 to Rs. 197 in 9MFY24. The company is trading below industry average at 10.5x EV/EBIDTA its annualised 9MFY24 profits in the upper price band. 

"We believe Bharti Hexacom is rightly placed to tap the growing demand for data consumption in the country on the back of the vast parental fiber connectivity and submarine cable investments.

With improving teledensity and continuous synergies unlocking, we believe Bharti Hexacom will continue to maintain its prominence in its areas of operation and recommend ‘Subscribe’ to the IPO with long term view," said the brokerage.

IndSec

According to the brokerage, Bharti Hexacom is valued at 36.2x|6.5x|10.7x PEx|PBVx|EV/EBITDA on a time-to-market basis at the upper price band. The issue is fairly priced (compared to its Promoter peer).

On the strength of (1) Promoted by Strong Parentage "Airtel," the brokerage has assigned a "Subscribe for Long Term" rating to the issue. (2) Dominant market share in operational areas; (3) Telecom penetration opportunities; (4) Possibility of raising ARPU as a result of Indian players' under-indexation relative to global peers; and (5) Rajasthan and Northeast network capital expenditures, respectively, are estimated to be between Rs. 110 and Rs. 130 billion and Rs. 30 and 40 billion for FY23–25. (6) As 5G usage increases, data monetisation and improved realisations for telcos are expected.

Also Read: Bharti Hexacom IPO to open tomorrow; here are 5 factors to consider before investing

Bharti Hexacom IPO GMP today

Bharti Hexacom IPO GMP or grey market premium is +57. This indicates Bharti Hexacom share price were trading at a premium of 57 in the grey market, according to investorgain.com.

After taking into consideration the upper end of the IPO pricing range and the present premium on the grey market, the Bharti Hexacom shares were predicted to list at a price of 627 a share, which is 10% more than the IPO price of 570.

Grey market activity for the past 14 sessions indicates that the IPO GMP is heading upward and that a robust listing is anticipated. According to researchers at investorgain.com, the lowest GMP is 30 and the maximum GMP is 65.

'Grey market premium' indicates investors' readiness to pay more than the issue price.

Also Read: Bharti Hexacom IPO: Company explains the reason for reducing the issue size

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

 

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Published: 05 Apr 2024, 08:58 AM IST
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