Bharti Hexacom IPO: The Bharti Hexacom IPO opens for subscription on April 3, with a price band at Rs 542-570 per share, and closes on April 5.

The Bharti Hexacom IPO opens for subscription on April 3, with a price band at Rs 542-570 per share, and closes on April 5.

 

Bharti Hexacom IPO has arrived! This much-anticipated initial public offering (IPO) by a subsidiary of the telecom giant Bharti Airtel is grabbing headlines. But should you invest? This comprehensive blog dives deep into the Bharti Hexacom IPO, analyzing key details, potential risks and rewards, and helping you make an informed decision.

Highlights of the Bharti Hexacom IPO:

 

Here are some of the highlights of the Bharti Hexacom IPO:

• Bharti Hexacom IPO will be open from 3 April 2024 to 5 Apr 2024. Bharti Hexacom IPO has a face value of ₹5 per equity share and the price band for the Bharti Hexacom IPO has been fixed between ₹542- ₹570 per share.
• Bharti Hexacom IPO has only an OFS component and does not include any fresh issue portion.
• As part of the OFS portion of the IPO, Bharti Hexacom IPO will issue a total of 7.5 cr shares, at the upper price band of the IPO at ₹570 per share to raise funds of ₹4,275.00 cr.
• Bharti Hexacom IPO comprises only OFS portion, therefore the total IPO size is ₹4,275.00 cr equivalent to the size of OFS.
• The company has been promoted by Bharti Airtel Limited. Before the listing, the promoter’s holding in the company stands at 70%. After the IPO listing promoter’s holding will be diluted.
• Axis Capital Limited, SBI Capital Markets Limited, ICICI Securities Limited, Bob Capital Markets Limited and Iifl Securities Ltd serves as the book running lead manager for the Bharti Hexacom IPO, Kfin Technologies will act as the registrar for the IPO.

Bharti Hexacom IPO Allocation

 

In the Bharti Hexacom IPO, the net offer will be distributed among different categories of investors, including QIB, retail investors and Non Institutional Investors or HNIs. The allocation breakdown for the IPO of Bharti Hexacom is as follows

Lot sizes for investing in the Bharti Hexacom IPO

A retail investor can purchase a minimum of 1 lot, which contains 26 shares, for a total value of ₹14,820. The maximum purchase for a retail investor is 13 lots, containing 338 shares, requiring ₹192,660.

Key Dates for Bharti Hexacom IPO?

 

Bharti Hexacom IPO will open for subscription on Wednesday, 3 April 2024 and close on Friday, 5 April 2024. The bidding window for the Bharti Hexacom IPO will commence on April 3, 2024, beginning at 10:00 AM, and conclude on April 5, 2024, ending at 5:00 PM. Cutoff time for UPI Mandate confirmation during the IPO period is set at 5:00 PM on the final day, April 5, 2024.

 

Financial Highlights of Bharti Hexacom IPO

 

Here’s a summary of the key financials of Bharti Hexacom IPO for the last three completed financial years

Profit After Tax for Bharti Hexacom IPO has shown growth over the past three fiscal years. In FY21, PAT stood at -₹1,033.90 cr. However, in FY22, PAT recovered to ₹1,674.60 cr. In the most recent financial year, FY23, there was a decrease in PAT to ₹549.20 cr, representing an increase from FY21 but a decrease from FY22.

 

Bharti Hexacom SME IPO Peer Comparison

 

Among its peers, Bharti Airtel has the highest EPS of 14.8, surpassing Bharti Hexacom with 10.98. Meanwhile, Vodafone Idea lags behind with the lowest EPS of -8.43. This comparison clearly shows how earnings per share vary among these companies, highlighting their differences.

What is Bharti Hexacom IPO?

Bharti Hexacom IPO is a main-board IPO of Bharti Airtel Limited, offering 750,000,000 equity shares with a face value of ₹5 each. The issue size translates to a potential fundraising of up to ₹4,275 crores. The price band for the issue is set at ₹542 – ₹570 per share.

What Does Bharti Hexacom Do?

Bharti Hexacom is a communications solutions provider offering consumer mobile services, fixed-line telephone services, and broadband services under the Airtel brand name. Their operations are concentrated in the Rajasthan telecom circle and the North Eastern states of India.

Bharti Hexacom GMP (Grey Market Premium): A Glimpse of Investor Interest

Bharti Hexacom GMP refers to the unlisted price of the shares in the grey market, which often indicates investor sentiment. As of today, the Bharti Hexacom GMP is hovering around ₹30-₹40 per share. While not a guarantee of listing gains, a positive GMP suggests potential investor interest.

Bharti Hexacom IPO Subscription Status: Tracking Demand

The Bharti Hexacom IPO subscription status will be updated daily during the subscription window (April 3rd – April 5th, 2024). This data reveals how many shares have been subscribed to compared to the available offering. A strong subscription can indicate high investor demand.

Bharti Hexacom Analysis: Strengths and Weaknesses

Strengths:

• Strong Brand Recognition: Bharti Airtel is a well-established brand with a loyal customer base.
• Focus on Growth Markets: Bharti Hexacom operates in regions with high mobile penetration potential.
• Experienced Management Team: The company benefits from the expertise of the Bharti Airtel leadership.

Weaknesses:

• Limited Geographical Presence: Bharti Hexacom’s operations are concentrated in specific regions, limiting diversification.
• Competition: The Indian telecom sector is highly competitive, with established players like Reliance Jio.
• Dependence on Parent Company: The company’s success is tied to the overall performance of Bharti Airtel.

Is Bharti Hexacom IPO Good? Analyzing Financials

A thorough Bharti Hexacom IPO analysis should consider the company’s financial health. Key metrics like revenue growth, profitability, and debt levels will influence its long-term prospects. Scrutinize financial statements and analyst reports to make an informed decision.

Expert Opinions on Bharti Hexacom IPO

Financial advisors and market experts often provide valuable insights on IPOs. Researching their Bharti Hexacom IPO analysis can offer different perspectives and help you understand potential risks and rewards.

Risks to Consider Before Investing in Bharti Hexacom IPO

• Market Volatility: The stock market can be unpredictable, and a downturn could impact listing gains.
• Regulatory Changes: The telecom sector is subject to government regulations, which could affect profitability.
• Competition: Intense competition in the Indian telecom market could squeeze margins.

Alternatives to Bharti Hexacom IPO: Diversifying Your Portfolio

Bharti Hexacom IPO might not be the only investment option. Consider diversifying your portfolio by exploring other IPOs, established companies in the telecom sector, or mutual funds for a balanced approach.

Should You Subscribe to Bharti Hexacom IPO? The Final Decision

Ultimately, the decision to subscribe to the Bharti Hexacom IPO rests with you. Conduct your own research, analyze the company’s financials, and assess your risk tolerance before investing.

Additional Resources for Making Informed Decisions

• Bharti Hexacom IPO DRHP (Draft Red Herring Prospectus): This document provides detailed information about the company’s financials, risks, and future plans.
• SEBI (Securities and Exchange Board of India) website: SEBI regulates IPOs in India and offers investor education resources.
• Financial news websites and publications: Stay updated on market trends and expert opinions on the Bharti Hexacom IPO.

Bharti Hexacom IPO: A Deep Dive into Fundamentals and Analysis

 

Fundamental Analysis: Unveiling Bharti Hexacom’s Financial Health

Beyond the headlines and hype, a sound investment decision requires a fundamental analysis of Bharti Hexacom. Here’s a breakdown of key financial metrics to consider:

Revenue Growth:

• Bharti Hexacom has exhibited consistent revenue growth, with a reported increase of 19.6% CAGR (Compound Annual Growth Rate) over FY21-FY23. This indicates a growing customer base and potential for future expansion.

Profitability:

• While revenue has grown, profitability paints a mixed picture. The company reported a net profit of ₹1,674.60 crore in FY22, but a significant decline to ₹549.20 crore in FY23. This decrease is attributed to an exceptional gain in FY22 that inflated profits.

Debt Levels:

• Bharti Hexacom has a debt-to-equity ratio of 1.48, which is considered on the higher side. This indicates a significant reliance on debt to finance operations, which could pose a risk in case of economic downturns.

Liquidity:

• The company’s current ratio (current assets divided by current liabilities) sits at a healthy 1.2, indicating sufficient liquidity to meet short-term obligations.

Financial Ratios:

• Return on Equity (ROE) and Return on Capital Employed (ROCE) are crucial profitability indicators. Bharti Hexacom’s three-year average ROE stands at 2.1%, and ROCE at 4.4%. These numbers are relatively low, suggesting the company isn’t generating significant returns on its investments.

Cash Flow:

• Positive cash flow from operations is essential for a company’s financial sustainability. Bharti Hexacom has reported positive operating cash flows in the last three years, indicating a healthy ability to generate cash internally.

Industry Analysis: Understanding the Telecom Landscape

The Indian telecom sector is a dynamic and competitive space. Here’s a closer look at the factors influencing Bharti Hexacom’s prospects:

• Market Growth: The Indian telecom market is expected to continue growing, fueled by rising mobile data consumption and increasing internet penetration. This presents an opportunity for Bharti Hexacom to expand its subscriber base.
• Competition: The sector is fiercely competitive, with established players like Reliance Jio and Vodafone Idea vying for market share. Bharti Hexacom will need to focus on differentiation and cost-efficiency to compete effectively.
• Government Regulations: Government policies and regulations can significantly impact the telecom industry. Changes in tariffs, spectrum allocation, and licensing requirements can influence profitability.

Valuation Analysis: Is Bharti Hexacom Priced Fairly?

The Bharti Hexacom IPO is priced at a P/E (price-to-earnings) ratio of 52x based on its EPS (earnings per share) as of March 31, 2023, and the upper price band. This valuation appears relatively high compared to the telecom industry average P/E ratio of 40x. This suggests the issue might be priced at a premium, factoring in future growth potential.

Technical Analysis: Looking at the Charts (Optional)

Technical analysis, using charts and indicators, can provide insights into investor sentiment and potential price movements. However, it’s important to remember that technical analysis is not a foolproof way to predict future stock performance.

Analyst Opinions: Weighing Expert Insights

Financial analysts often provide valuable perspectives on IPOs. Analyzing their Bharti Hexacom IPO analysis can offer insights into potential risks and rewards. Keep in mind that analyst opinions can differ, so it’s crucial to consider various viewpoints.

Bharti Hexacom IPO: A Calculated Decision

 

The Bharti Hexacom IPO has arrived, sparking a flurry of interest among potential investors. This comprehensive blog has delved into the intricacies of the offering, analyzing its strengths and weaknesses, financial health, and the broader telecom landscape.

Key Takeaways:

• Bharti Hexacom boasts a strong brand association with Bharti Airtel and operates in high-growth telecom circles.
• The company’s financial performance reveals a mix of positive and concerning aspects. While revenue has grown steadily, profitability remains a concern due to a recent decline.
• The telecom sector in India is experiencing significant growth, but fierce competition and government regulations pose challenges.
• The IPO is priced at a premium compared to the industry average, potentially reflecting future growth expectations.

Investing in the Bharti Hexacom IPO: A Balanced Approach

The decision to subscribe to the Bharti Hexacom IPO hinges on your individual risk tolerance and investment goals. Here are some key considerations:

• Risk Tolerance: If you’re averse to risk, the recent decline in profitability and the company’s reliance on debt financing might warrant caution.
• Investment Horizon: Bharti Hexacom has the potential for long-term growth, but this might not translate into immediate listing gains. Investors seeking short-term returns might need to look elsewhere.
• Portfolio Diversification: Consider including the Bharti Hexacom IPO as part of a diversified portfolio to mitigate risk. Research other investment options to spread your capital across different sectors.

Beyond the Hype: Conduct Your Own Research

Don’t solely rely on media reports or analyst opinions. Conduct your own thorough research by:

• Scrutinizing the DRHP (Draft Red Herring Prospectus): This document provides in-depth details about the company’s financials, risks, and future plans.
• Analyzing financial statements: Pay close attention to revenue growth, profitability margins, debt levels, and cash flow statements.
• Staying updated on market trends: Keep yourself informed about developments in the telecom sector and overall market conditions.

Remember: The stock market is inherently volatile, and past performance is no guarantee of future results.

Alternatives to Consider: Broadening Your Investment Horizons

The Bharti Hexacom IPO is not the only investment opportunity available. Explore these alternatives to build a well-rounded portfolio:

• Other IPOs: Research upcoming IPOs in different sectors to diversify your holdings and potentially benefit from new growth opportunities.
• Established Telecom Companies: Consider investing in established telecom companies with a proven track record.
• Mutual Funds: Explore mutual funds that invest in a basket of telecom stocks, offering diversification and professional management.

The Final Word: Invest Wisely, Stay Informed

The Bharti Hexacom IPO presents a potential investment opportunity, but it’s not without its risks. By conducting thorough research, analyzing the company’s fundamentals, and understanding the broader market landscape, you can make a well-informed decision that aligns with your financial goals. Remember, investing is a marathon, not a sprint. Stay informed, make calculated decisions, and build your wealth over time.

Remember: Fundamental and other analyses are tools to help you make informed decisions. They don’t guarantee future success. Always conduct your own research and due diligence before investing.

Disclaimer: This blog is for informational purposes only and should not be considered financial advice. Please consult with a qualified financial advisor before making any investment decisions.

Resources:

1. https://www.moneycontrol.com/news/business/ipo/bharti-hexacom-anchors-rs-1924-cr-from-investors-before-ipo-opens-on-april-3-12564141.html
2. https://www.hindustantimes.com/business/bharti-hexacom-ipo-opens-today-5-things-to-know-before-subscribing-101712109720346.html
3. https://www.cnbctv18.com/market/bharti-hexacom-ipo-opens-today-know-gmp-should-you-subscribe-review-19391365.htm
4. https://www.indiatoday.in/business/story/bharti-hexacom-ipo-latest-gmp-issue-price-band-details-all-you-need-to-know-2522374-2024-04-02
5. https://www.businesstoday.in/markets/ipo-corner/story/bharti-hexacom-ipo-should-you-subscribe-to-the-bharti-groups-issue-423964-2024-04-02

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