The government is considering to sell the remaining 15% stake in multiple tranches, and the Telecom Consultants India Limited (TCIL) would share proceeds of Bharti Hexacom’s debut initial public offering (IPO) as a special dividend.
“Bharti Hexacom Limited (BHL) IPO has fetched Rs 4,275 crore from 15% stake sale of TCIL. The proceeds of IPO shall be paid as a special dividend from the profit of the company after deduction of taxes and expense as per the Company’s Act,” Sanjeev Kumar, Chairman, TCIL told ETTelecom.
Last week, Bharti Hexacom, a unit of Sunil Mittal-driven Bharti Airtel completed shares allotment to the investors following the public issue early this month.
The qualified institutional investors (QIB) showed an overwhelming response and the portion was oversubscribed by 48.57-fold.
“The investors have shown confidence in the growth story of the telecom sector. A right mix of price and issue size can attract investors’ interest and fetch better returns,” Kumar said.
The Ministry of Communications’ strategy to sell Bharti Hexacom stake in tranches, according to analysts, worked out well, and is set for a windfall gain for the government.
On Friday, Bharti Hexacom’s stocks were trading at more than Rs 950 on the Bombay Stock Exchange (BSE).
The remaining 15% of stake, if valued at current price, may fetch more than Rs 7,000 crore, taking the total tally to nearly Rs 11,500 crore, surpassing the government’s expectation of Rs 9,500 crore 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.
The next chunk will go public after the lock-in period of 6 months and necessary regulatory approvals.
TCIL, a state-run telecom and engineering firm, is expecting to achieve an extraordinary revenue growth of nearly 25% in FY 2024-25, over the FY 2023-24 revenue of nearly Rs 2,500 crores, according to the top official.
Bharti Airtel holds 70 percent stake or 35 crore shares in Bharti Hexacom and the remaining 30 percent shareholding, equivalent to 15 crore equity shares is held by non-promoter TCIL, of which it sold 7.5 crore shares at Rs 4,275 crore.
Early this week, brokerage Jefferies said that Bharti Hexacom has a strong growth potential and represents a strong investment opportunity in the Indian telecom sector.
Bharti Hexacom provides consumer mobile, fixed-line telephony and broadband services under the Airtel brand name to customers in Rajasthan and the Northeast.
Source: Economic Times