Bharti Hexacom cleared for IPO fundraising by SEBI

Bharti Airtel's subsidiary, Bharti Hexacom, receives approval for an IPO from SEBI. The raised funds could be used to upgrade telecom infrastructure in India.

Rashi Grover
New Update
 A cell phone tower with numerous antennas, providing strong signal coverage for mobile devices.

The image shows a large antenna mounted on a pole against a sky background. The antenna is likely used for electrical supply or communication purposes.

In a move that could have significant implications for India's telecommunications infrastructure landscape, the Securities and Exchange Board of India (SEBI) has granted its approval to Bharti Airtel's wholly-owned subsidiary, Bharti Hexacom, to raise funds through an Initial Public Offering (IPO). 


This development marks a potential turning point for the telecom sector, potentially paving the way for increased investment and development of critical infrastructure.

Bharti Hexacom, established in 1995, is a leading telecommunications service provider with a strong presence in Rajasthan and the North Eastern regions of India. The company offers mobile telephony services, along with fixed-line and broadband services in Rajasthan. 

The upcoming IPO will involve an offer for sale (OFS) of 10 crore equity shares by Telecommunications Consultants India Limited (TCIL), a government-owned enterprise that currently holds a 30% stake in Bharti Hexacom. This move signifies the government's intention to partially exit its investment in the company and potentially unlock value for itself. Bharti Airtel, which holds the remaining 70% stake, will not receive any proceeds from the IPO.


Industry analysts believe that the Bharti Hexacom IPO could be a significant milestone for several reasons. Firstly, it could inject much-needed capital into the Indian telecom sector, which has been facing intense competition and financial pressure in recent years. The funds raised through the IPO could be used by Bharti Hexacom to expand its network infrastructure, invest in new technologies like 5G, and potentially acquire smaller players in the market.

Secondly, the success of this IPO could pave the way for other telecom companies in India to consider similar fundraising strategies. This could lead to a more vibrant capital market for the sector, attracting further investments and fostering healthy competition. Finally, the involvement of a state-owned enterprise like TCIL in the IPO process could set a precedent for future government divestments in strategic sectors. This could potentially lead to a more efficient allocation of resources and a more active role for private players in driving India's telecommunications infrastructure development.

The anticipated effect of Bharti Hexacom's IPO on Bharti Airtel's finances is favorable. It offers Bharti Airtel a chance to generate funds and realize the value of its subsidiary through listing. This move has the potential to strengthen Bharti Airtel's financial standing, enhance liquidity, and empower it to pursue strategic ventures and growth strategies.  

However, some analysts also caution that the success of the Bharti Hexacom IPO will depend on several factors. The overall market conditions, investor sentiment towards the telecom sector, and the valuation offered during the IPO will play a crucial role in determining its success. Additionally, regulatory issues and the ongoing competition within the telecom industry could pose challenges.