Bharti Hexacom shares to debut at bourses on Friday: Will it deliver a strong listing pop?

Shares of Bharti Hexacom Ltd may deliver decent listing gains to investors on debut on Friday. The grey market premium for the telecom and broadband services provider has been creeping higher gradually since the issue opened for bidding on .

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 over the issue price of Rs 570 per share. The premium in the unofficial market stood at Rs 80-85 a day ago while it was Rs 65 apiece when the issue got opened for public bidding.

Market participants expect the stock to offer double-digit return, in line with the grey market premium. They advised investors to retain the stock for the long term, given the company’s robust business model, strong parentage and sound financial standing.

“Bharti Hexacom is expected to make its stock market debut with moderate listing gain of around 15 per cent over the issue price as signaled by its current grey market premium (GMP),” said Shivani Nyati, Head of Wealth, Swastika Investmart.

The IPO valuation of 51 times P/E appears fully priced, leaving limited room for immediate gains after listing, she said.

Bharti Hexacom leverages a large customer base, strong brand recognition, and an extensive distribution network to operate in high-growth markets. Additionally, the company benefits from its association with its supportive parent company, Bharti Airtel, Nyati added.

The New Delhi-based company sold its  IPO in the Rs 542-570 price range. The company successfully raised Rs 4,275 crore through its stake sale, which consisted entirely of an offer-for-sale of up to 7,50,00,000 equity shares by Telecommunications Consultants India.

"We expect Bharti Hexacom to list a healthy 10-12 per cent above its issue price, considering the current optimistic uptrend in the markets, along with healthy subscription demand, " said Prashanth Tapse, Senior VP Research, Mehta Equities. "We recommend allotted investors to 'hold' it for long term perspective only," he said.

The telecommunications-services provider witnessed a strong response to its IPO, fetching  an overall subscription of 29.88 times. The quota for qualified institutional bidders was subscribed 48.57 times while that of non-institutional bidders was subscribed 10.52 times. The portion reserved for retail investors was subscribed 2.83 times.

“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 offers fixed-line telephone and broadband services to clientele across Rajasthan and the North East telecom circles in India. Its service footprint extends to states including Rajasthan, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura.

The book running lead managers for the Bharti Hexacom IPO included Axis Capital, BoB Capital Markets, SBI Capital Markets, ICICI Securities, and IIFL Securities, with Kfin Technologies serving as the registrar for the issue.