Bharti Airtel holds a majority 70% stake in its unit, Bharti Hexacom, which runs mobile services in Rajasthan and Northeast circles. The 30% government stake in Bharti Hexacom is held through Telecommunications Consultants India Ltd (TCIL), a state-owned telecom engineering and consulting firm with business interests overseas, including in pan-African and West Asia markets.
“The IPO (initial public offering) process for Bharti Hexacom has just been initiated internally…the government expects a potential sale of its 30% stake to fetch around Rs 10,000 crore,” the official cited told ET.
Sunil Mittal-led Bharti Airtel is believed to have started the process of listing Bharti Hexacom – valued upwards of Rs 30,000 crore – to give the government a full or partial exit route, people aware of the matter said.
Airtel, on its part, is likely to retain its 70% stake in Bharti Hexacom, these people added.
“Our company, in its ordinary course, explores various modes of raising funds, including but not limited to raising funds by accessing capital markets … the company will make requisite announcements, if any, as required under applicable laws,” Airtel said in a written response to ET’s queries.Airtel shares closed 0.22% lower at Rs 969.30 on the BSE on Wednesday.Airtel has reportedly appointed a clutch of investment banks, including Axis Capital, SBI Caps, IIFL and ICICI Securities to start the IPO process. The listing is likely to be concluded by early-2024.
Industry experts, though, said the government’s expectations of raking in around Rs 10,000 crore from a potential divestment of its 30% stake in Bharti Hexacom is more than three times higher than an earlier valuation conducted by brokerage J M Financial some two years ago.
Back in February 2022, J M Financial had said in a note that its calculations suggested that the potential value of the government’s 30% stake in Bharti Hexacom is unlikely to be significantly above Rs 3,100 crore.
The pricing of Bharti Hexacom’s IPO (as in the final offer price) is likely to be determined after publication of a prospectus and through a book-building process, people aware said.
Parent Airtel had raised its holding in unlisted Bharti Hexacom to 70% back in 2004 by acquiring Rajiv Malhotra-headed Shyam Telecom’s 37.5% stake in the company.
