TCIL is to offload 15% of 7,50,00,000 equity shares and it is expected to bring a total amount of Rs 4,275 crore.
Mumbai, NFAPost: Bharti Hexacom Ltd formally launched its initial public offering (IPO) at a press conference on Wednesday at Taj Hotel in Mumbai and announced its price band in the range of Rs 542 to Rs 570 per equity share of face value of Rs 5 each.
Bharti Hexacom Ltd is a joint venture initiative formed in 1995 by government-owned Telecommunications Consultants India Limited (TCIL) and Bharti Airtel Limited (BAL) holding shares in the ratio of 30:70.
Bharti Hexacom Ltd is a communications solutions provider that serves customers in Rajasthan and the North East telecommunication circles in India, which include the states of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura. It also provides fixed-line telephone and broadband services. It uses the “Airtel” brand to provide services.
Besides Bharti Hexacom Chief Financial Officer Akhil Garg and Bharti Hexacom Limited Head of Investor Relations Naval Seth and Bharti Hexacom Limited Director Soumen Ray, the IPO announcement event had the participation of TCIL Chairman & Director Sanjeev Kumar and TCIL Surajit Mandol were present at the press conference to unveil the Initial Public Offering of Bharti Hexacom Limited.
The issue will open for subscription on Wednesday, April 3 and will close on Friday, April 5. Bids can be placed for multiples of 26 shares, with a minimum bid of 26.
Bharti Hexacom officials said the IPO funding will be used for two circles of Rajasthan and North East. The prospects were great in these areas and the tie-up with local cable operators to reach the households was part of the grand strategy of the service provider.
The aim was to acquire and retain quality customers by providing cost-effective services through environment-friendly transmission methods. The risks however, as spelt out at the press conference were the volatile nature of the region of the NE and the reliance on third-party infrastructure to provide services.
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 business Telecommunications Consultants initially planned to sell up to 10 crore equity shares, according to the company’s draft red herring prospectus (DRHP).
TCIL Chairman & Director Sanjeev Kumar said at a press conference that the final issue structure had been decided after consulting with the book-running lead managers (BRLMs) and considering investor feedback.
“The Government chose to sell just 15% of the shares in the IPO through TCIL. A six-month lock-in period applies to TCIL holdings after the date of allocation. The decision on additional offloading will be made later, at a suitable time, and will take into consideration the overall condition of the market, existing environment, and other factors at that particular moment,” said TCIL Chairman & Director Sanjeev Kumar
Also, the IPO has set aside not less than 75% of the offer for qualified institutional buyers (QIB), not more than 15% of the offer for non-institutional institutional investors (NII), and not more than 10% of the offer for retail investors.
At the upper end of the price band, the offer for sale (OFS) of up to 7,50,00,000 equity shares approximately 15% of TCIL’s holding, would fetch Rs 4,275 crore to the company.
