Bharti Hexacom IPO shares to make D-St debut on Wednesday; here's what GMP signals

Shares of Bharti Hexacom are all set for its debut at Dalal Street on Wednesday and if one goes by the signals from the grey markets, the company is all set to deliver a decent listing pop to the investors. The premium in the unofficial market has been climbing higher since the closure of the bidding process.

Last heard, Bharti Hexacom was commanding a premium of Rs 95-100 in the grey market, suggesting a listing pop of 17-18 per cent the investors over the given issue price. The premium in the unofficial market stood at Rs 80-85 about 24 hours earliers, while it was Rs 65 apiece when the issue had opened for bidding.

Market participants believe that the stock may deliver at a decent double digit premium, in line with the signals given by the grey market premium. However, they believe that investors should hold the stock for long-term considering the robust business model, strong parentage and sound financials.

Bharti Hexacom IPO received solid response as investors looked more aggressive to grab midcap telecommunication growth story, said Prashanth Tapse, Senior VP Research, Mehta Equities. "Considering the current optimistic uptrend in the markets, along with healthy subscription demand, we expect Bharti Hexacom to list a healthy 10-12 per cent above its issue price," he said.

The relationship between Bharti Hexacom and Airtel presents a compelling synergy, leveraging Airtel's brand strength, diverse service offerings and sustainability focus to drive sustained market growth. Hence, considering all the parameters we recommend allotted investors to 'hold' the it for long term perspective only," he said.

The New Delhi-based Bharti Hexacom sold its IPO in the price band of Rs 542-570 per share with a lot size of 26 equity shares. The company raised Rs 4,275 crore through its primary stake sale, which was entirely an offer-for-sale of up to 7,50,00,000 equity shares by Telecommunications Consultants India.

The telecommunications-services provider had received a decent response for its IPO, fetching an overall subscription of 29.88 times. The quota for qualified institutional bidders was subscribed 48.57 times while the allocation for non-institutional bidders was booked 10.52 times. The portion reserved for retail investors was subscribed only 2.83 times by the end of the bidding.

Bharti Hexacom is expected to list on at a decent premium, roughly around 15 per cent, following the strong oversubscription numbers, said Prathamesh Masdekar, Research Analyst at StoxBox. "We remain optimistic on the company’s performance going ahead and advise investors who have received allotment to hold shares from a medium to long term perspective," he said.

Bharti Hexacom enjoys extensive market coverage and penetration. Moreover, one of the key focus areas is prudent capital allocation and improving return on capital employed, which is reflected in the capital expenditure on both spectrum and non-spectrum spending, said Masdekar.

Bharti Hexacom, which was incorporated in 1995, provides fixed-line telephone and broadband services to customers in Rajasthan and North East telecom circles in India. The company provides services in states such as Rajasthan and Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland and Tripura.

Axis Capital, BoB Capital Markets, SBI Capital Markets, ICICI Securities and IIFL Securities are the book running lead managers of the Bharti Hexacom IPO, while Kfin Technologies is the registrar for the issue.