Bharti Airtel has waived off its right of first refusal (RoFR) to acquire state-owned Telecommunications Consultants India Ltd\u2019s 30% stake in Bharti Hexacom as it sees no immediate value in such a move, analysts said, quoting the telco\u2019s senior management.<\/p>\n
Last month, Bharti Airtel subsidiary, Bharti Hexacom, had filed a draft offer document with Securities & Exchange Board of India (Sebi) to sell a 20% stake of TCIL which will provide the government a partial exit. TCIL\u2019s holding will drop to 10% after Bharti Hexacom\u2019s initial public offer (IPO), while parent company, Bharti Airtel, will retain its 70% stake in the unit.<\/p>\n
\u201cBharti\u2019s management mentioned that Airtel had a right of first refusal to acquire this 30% stake (in Bharti Hexacom) owned by the government via TCIL, but they waived off this right as of now as the telco doesn\u2019t see any value in acquiring the stake from the market, post-Bharti Hexacom listing),\u201d BofA Securities said in a note seen by ET.<\/p>\n
BofA added that Airtel\u2019s management believes that a potential Bharti Hexacom initial public offer (IPO), over any other method, would provide transparency in pricing, which is a key requisite of the government when it requires to fully sell its stake in Airtel\u2019s subsidiary.<\/p>\n
BofA had participated in an analyst meet hosted by Bharti Hexacom on February 12 in the run-up to the latter\u2019s listing.<\/p>\n
The global brokerage said it does not see any impact on Airtel from any potential listing of Bharti Hexacom as the Sunil Mittal-led parent is not reducing its stake in the unit or raising money, and nor would a change of Hexacom\u2019s shareholders alter any P&L item.<\/p>\n
Bharti Hexacom runs mobile services in Rajasthan and Northeast. Top industry insiders expect the government to pocket around Rs 6,700 crore from the upcoming 20% TCIL stake sale in the company.<\/p>\n
State-owned TCIL is a telecom engineering and consulting firm with business interests overseas, including in pan-African and West Asia markets.<\/p>\n
Bharti Hexacom doesn’t own any fibre and leases it from Airtel at an arms\u2019 length pricing basis. It, though, owns spectrum and radio gear. Hexacom also pays for brand & corporate overheads.<\/p>\n
ET had reported in its November 23, 2023, edition that the listing is likely to be concluded by early-2024.<\/p>\n
Analysts believe the potential of fixed wireless services is high in the two Hexacom circles (Rajasthan, Northeast), given the large land mass and challenging terrain. The connected home-pass cost, though, is the same for the Airtel and Hexacom circles.<\/p>\n
But Airtel\u2019s management has said Hexacom won\u2019t be using satellite broadband services. This is since a mobile service is a mass market low-cost high-bandwidth service while satellite broadband caters to more critical and backup communications. \u201cSatellite broadband also can\u2019t be used to watch videos as its speed is low and cost is high,\u201d BofA said.<\/p>\n
In its draft red herring prospectus, filed January 19, 2024, Bharti Hexacom had said the company would not receive any proceeds, and that, all offer proceeds would be received by TCIL, post deduction of offer-related expenses to be borne by the latter. Bharti Hexacom expects the listing to enhance the company\u2019s visibility and brand image.<\/p>\n
Pricing of Bharti Hexacom\u2019s IPO (as in the final offer price) will be determined through a book-building process. Book running lead managers are SBI Capital Markets, Axis Capital, ICICI Securities, BOB Capital Markets and IIFL Securities as per the draft prospectus.<\/p>\n
Parent Airtel had raised its holding in the unlisted Bharti Hexacom to 70% back in 2004 by acquiring Rajiv Malhotra-headed Shyam Telecom\u2019s 37.5% stake in the company.<\/p>\n","protected":false},"excerpt":{"rendered":"
Bharti Airtel has waived off its right of first refusal (RoFR) to acquire state-owned Telecommunications Consultants India Ltd\u2019s 30% stake in Bharti Hexacom as it sees no immediate value in such a move, analysts said, quoting the telco\u2019s senior management. Last month, Bharti Airtel subsidiary, Bharti Hexacom, had filed a draft offer document with Securities & Exchange Board of India (Sebi) to sell a 20% stake of TCIL which will provide the government a partial exit. TCIL\u2019s holding will drop to 10% after Bharti Hexacom\u2019s initial public offer (IPO), while parent company, Bharti Airtel, will retain its 70% stake in […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8],"tags":[],"class_list":["post-800892","post","type-post","status-publish","format-standard","hentry","category-telecom"],"acf":[],"_links":{"self":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts\/800892","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/comments?post=800892"}],"version-history":[{"count":0,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts\/800892\/revisions"}],"wp:attachment":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/media?parent=800892"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/categories?post=800892"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/tags?post=800892"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}