Bharti Hexacom Limited IPO Summary

About the company:

Incorporated in 1995, Bharti Hexacom Limited provides mobile services, fixed-line telephone and broadband services to customers in Rajasthan and North East telecom circles in India. The Government of India through Telecommunications Consultants India Limited (“TCIL”) owns 30% of the company and Bharti Airtel Ltd owns 70%.

The company provides services in states such as Rajasthan and Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura.

By December 31, 2023, the company has invested ₹206 billion in digital infrastructure capital expenditures to be future-ready and has an aggregate of 27.1 million customers across 486 census towns across both circles (Rajasthan and Northeast).

By December 31, 2023, the company had established a presence in 90 cities through 51 retail outlets and 24 small format stores opened over the last three fiscal years. Their distribution network comprised 616 distributors and 89,454 retail touchpoints.

As of December 31, 2023, the company had 1.9144 crore data customers, out of which 1.8839 crore were 4G and 5G customers.

The following table sets forth details of the company’s wireless revenue market share and customer market share (as reported by TRAI) for the periods indicated:

Industrial Overview:

China is the largest telecom market, with 1,781 million wireless customers as of 2022. India follows with 1,143 million wireless customers as of 2022.

India has emerged as one of the five fastest-growing wireless telecom markets, with its customer base clocking 2.9% CAGR between calendar years 2013 and 2022. However, at 82.6 as of 2022, India’s wireless customers per 100 people are the lowest among the top five wireless markets as well as among emerging markets, indicating potential for further growth.

Telecommunication has been playing a pivotal role in the country’s economic growth. It is the backbone of many industries, including e-commerce, media and entertainment, finance, information and technology (IT), healthcare, transportation, and logistics. The sector facilitates the seamless movement of data worldwide through wired or wireless channels and significantly influences economic progress.

The industry spent ₹ 1,500 billion during the 5G auction in 2022, with Reliance Jio, Bharti Airtel, and Vodafone Idea accounting for ₹ 800.8 billion, ₹ 430.4 billion and ₹ 188.0 billion, respectively. Further, Indian telecom operators have spent nearly ₹ 3,000 billion since 2014 to acquire spectrum across various bands. The telecom sector has a low average asset turnover ratio of 0.3 times (Fiscals 2020-23), indicating high capex requirements on a sustained basis. Capex intensity is high and estimated at approximately 30% of total revenue in Fiscal 2023 and approximately 25% in Fiscals 2024 and 2025.

Industry revenue CAGR of 8.5-9.5% is likely over the next five years, driven by growth in data users and consumption In Fiscal 2023, the industry’s revenue grew 23.8% year-on-year, attributable to the full impact of the tariff increase that was put into effect in Fiscal 2022. Revenue logged a 5.6% CAGR between Fiscals 2014 and 2023 (compared with 13.9% between Fiscals 2019 and 2023). During this time, the industry saw price wars as Reliance Jio entered the fray. That said, industry growth was supported by various structural and procedural reforms implemented by the government to promote healthy competition, encourage investment, reduce the regulatory burden on telecom service providers (TSPs), and protect the interests of consumers. Between Fiscals 2023 and 2028, the telecom industry is expected to clock a CAGR of 8.5-9.5%. This growth will be driven by a 7.0-7.5% boost in ARPU, driven by higher data usage and tariff increase. Additionally, the higher penetration of 4G and 5G services than in Fiscal 2023 will contribute to this growth.

IPO Objectives:

The objectives of the Offer are -

1. To carry out the Offer for Sale of up to 75,000,000 Equity Shares by the Selling Shareholder. TCIL will partially exist.


The company’s revenue appears to have increased steadily over the three years, from ₹4,602.30 crore in FY 2020-21 to ₹6,579.00 crore in FY 2022-23.

The company’s EBITDA also appears to have increased steadily over the three years, from ₹1,137.30 crore in FY 2020-21 to ₹2,888.40 crore in FY 2022-23 with an average of 59.36% annual growth.

The ARPU (Average Revenue Per User) appears to increase from ₹ 135 in FY 2020-21 to ₹ 185 in FY 2022-23.

The ROCE line starts at -1.58% in FY 2020-21, increases to 4.1% in FY 2021-22, and then eventually reaches 10.72 in FY 2022-23.

P&L Report (Exceptional item impact)

Note: The fluctuation in PAT is due to the impact of exceptional items.


The company's price-to-book ratio stands at 6.77 and the company's price-to-earnings ratio stands at 51.91.

Peer Comparison:

Key Risks:

1. The company's revenue is reliant on providing mobile telephone services in Rajasthan and the North East circle. Unfavorable developments in these regions could harm the company's business, financial results, and overall condition.

2. The company is currently facing legal proceedings alongside its promoter. An unfavorable outcome in any of these cases could negatively impact the company's reputation, financial health, business operations, and overall results.

IPO Details:

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