Bharti Hexacom IPO: will the company sink or swim?

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Bharti Hexacom IPO: will the company sink or swim?
Credit: © Reuters

The year 2024 is fast shaping up to be one of exciting IPO launches, from Reddit to Astera Labs and even, potentially, an upcoming one from Shein.

The latest buzz-inducing IPO is Bharti Hexacom of India, currently finishing up day two of its three-day IPO launching process.

What is Bharti Hexacom?

Bharti Hexacom is a telecommunications company operating in northern regions of India, such as Rajasthan.

As such, it provides mobile services, broadband and even landline telephonic offerings in these areas. It is a subsidiary of Indian telecoms giant Bharti Airtel (NS: BRTI ).

Reception for the Bharti Hexacom IPO: what has happened so far?

Due to the three-day nature of Bharti Hexacom’s IPO, there have been distinct stages visible in the company’s debut process, in terms of each of the three days.

Yesterday saw a relatively lukewarm and cautious initial response for the IPO on day one, with 34% of Bharti Hexacom’s ₹4,275 crore public offer subscribed to throughout the course of the day.

Today saw a heating up of the launch, however, with most of the shares having been sold (that is, all retail and non-institutional investors’ shares and 87% of all institutional buyers’ shares).

Greater interest from smaller parties

What is significant, also, is changes to who is buying Bharti Hexacom shares thus far.

The way that the IPO has been structured, 75% of the IPO offering was reserved for qualified institutional buyers, with 15% reserved for non-institutional institutional investors. The smallest proportion (10%) went to retail investors.

At first, Bharti Hexacom experienced subdued buying of shares across all three investor classes. However, towards the end of the first day, the IPO experienced significantly more interest from retail investors than the other two categories. During the second day, this was overtaken by the non-institutional investors.

By the end of day two, the non-institutional institutional investors’ portion of the IPO had been subscribed to 1.13 times, according to Business Today. In contrast, retail investors’ portion was subscribed 1.01 times, and the qualified institutional buyers’ portion of the IPO around 0.87 times, or around 70% of their allotted reservation.

This means that, so far, the IPO has received the most interest from ‘smaller’ individual investors and groups, rather than bigger corporations.

What’s next with the Bharti Hexacom IPO?

The end date of the IPO launch is tomorrow, April 5th. Thereafter, the allotment of bids will be calculated, allegedly on April 8th.

The final step in the IPO process will be Bharti Hexacom officially listing on the Bombay stock exchange (BSE), which it will likely do on April 12th.

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