Bharti Hexacom Announces IPO with Government Share Sale: Check Financial Highlights and Operational Risks
Bharti Hexacom Ltd., a subsidiary of Bharti Airtel, is set to launch its initial public offering (IPO) through an offer-for-sale of shares by the government-owned Telecommunication Consultant India Ltd.
The IPO proceeds will go to the government as it sells its stake, while Bharti Airtel will retain a 70% stake in Bharti Hexacom.
Bharti Hexacom, operating in Rajasthan and North East circles since 1995, reported a revenue of Rs 3,420.2 crore for the six months ended September 2023, with a full-year revenue of Rs 6,579 crore for FY23, marking a 22% increase.
The company’s net profit at the end of September 2023 was Rs 69.1 crore, compared to Rs 195.2 crore in the same period of 2022, including an exceptional loss of Rs 303 crore from April to September 2023.
Operational profit for FY23 was Rs 2,925.9 crore, up 54% from the previous fiscal, with a margin of 44%.
Cash flow from operations as of September 30, 2023, was Rs 1,988.7 crore, and net cash stood at Rs 46.3 crore. Total borrowings were Rs 6,235.5 crore.
Operational risks include concentration in only two circles, with growth potential and customer additions limited. The North East operations face challenges due to difficult terrain and harsh weather conditions.
The company might incur additional capital expenditure for infrastructure in remote regions, along with higher logistics costs.
Outstanding legal proceedings against Bharti Hexacom could involve an aggregate amount of Rs 2,233.8 crore, potentially diverting management’s time, attention, and financial resources.
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