Bharti Hexacom IPO: Anchor Allocation at 45%

About the Bharti Hexacom IPO

Bharti Hexacom IPO, a book-built issue worth ₹4,275.00 crores, comprises entirely of an offer for sale of 7.5 crore shares.

Bharti Hexacom IPO bidding commenced for subscription on April 3, 2024, and is scheduled to conclude on April 5, 2024. The allotment for the Bharti Hexacom IPO is anticipated to be finalized on Monday, April 8, 2024. Following this, the IPO is set to list on both BSE and NSE, with a tentative listing date fixed as Friday, April 12, 2024.

The price band for the Bharti Hexacom IPO has been established at ₹542 to ₹570 per share. Retail investors are required to apply for a minimum lot size of 26 shares, entailing a minimum investment of ₹14,820. For SNIIs, the minimum lot size is 14 lots, equivalent to 364 shares, amounting to ₹207,480. Meanwhile, for BNII investors, the minimum lot size is 68 lots, comprising 1,768 shares, totaling ₹1,007,760.

Bharti Hexacom IPO purpose of the Offer is to sell up to 75,000,000 Equity Shares owned by the Selling Shareholder and to achieve the benefits of listing the Equity Shares on the Stock Exchanges.

Read more about Bharti Hexacom IPO

A brief on the anchor allocation of Bharti Hexacom IPO

The anchor issue of Bharti Hexacom Ltd saw a relatively strong response on April 2, 2024 with 45% of the IPO size getting absorbed by the anchors. Out of 75,000,000 shares (750.00 lakh shares approximately) on offer, the anchors picked up 33,750,000 shares (337.50 lakh shares approximately) accounting for 45% of the total IPO size. The anchor placement reporting was made to the BSE late on Wednesday, April 2, 2024; one working day ahead of the IPO opening on Thursday, April 2, 2024.

The entire anchor allocation was made at the upper price band of ₹570 per share. This includes the face value of ₹05 per share plus a share premium of ₹565 per share, taking the anchor allocation price to ₹570 per share. Let us focus on the anchor allotment portion ahead of the Bharti Hexacom Ltd IPO, which saw the anchor bidding opening and also closing on April 2, 2024. Post the anchor allocation, here is how the overall allocation looked.

Data Source: BSE

Here it must be noted that the 33,750,000 shares issued to the anchor investors on 23rd March 2024, were actually reduced from the original QIB quota; and only the residual amount would be available to QIBs in the IPO. That change has been reflected in the table above, with the QIB IPO portion reduced to the extent of the anchor allocation. The overall allocation to QIBs includes the anchor portion, so the anchor shares allotted has been deducted from the QIB quota for the purpose of the public issue.

Bharti Hexacom IPO Anchor Investors Details

Before we go into the details of the actual anchor allotment, a quick word on the process of anchor placement. The anchor placement ahead of an IPO/FPO is different from a pre-IPO placement in that the anchor allocation has a lock-in period of just one month, although under the new rules, part of the anchor portion will be locked in for 3 months. It is just to give confidence to investors that the issue is backed by large established institutions. It is the presence of institutional investors like mutual funds and foreign portfolio investors (FPIs) that gives confidence to the retail investors. Here are details of the anchor lock-in for the issue of Bharti Hexacom Ltd.

Bharti Hexacom IPO raises ₹1,923.75 crore from anchor investors. Bharti Hexacom IPO Anchor bid date is April 2, 2024.

However, the anchor investors cannot be allotted shares at a discount to the IPO price. This is explicitly stated in the SEBI revised regulations as under, “As per the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirement) Regulations, 2018, as amended, in case the Offer Price discovered through book building process is higher than the Anchor Investor Allocation Price, then the Anchor investors will be required to pay the difference by the pay-in as specified in the revised CAN.

An anchor investor in an IPO is normally a qualified institutional buyer (QIB) like a foreign portfolio investor or mutual fund or insurance company or a sovereign fund which invests before the IPO is made available to the public as per SEBI regulations. Anchor portion is part of the public issue, so the IPO portion to the public (QIB portion) is reduced to that extent. As initial investors, these anchors make the IPO process more attractive for investors, and instil confidence in them. Anchor investors also largely aid in price discovery of the IPO

Anchor allocation investors in Bharti Hexacom IPO

There are the 97 anchor investors who, have been allotted 45% or more of the anchor allocation done ahead of the IPO of Bharti Hexacom Ltd. The entire anchor allocation of ₹1,923.75 crore was spread across a total of 97 major anchor investors. The detailed allocation is captured in the table which is give access in the hyperlink below, indexed descending on size of anchor allocation.

https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20240402-58

The detailed report is available in PDF format and can be downloaded by clicking on the link above. Alternatively, readers can also opt to cut this link and paste in their browser, in case the link is not directly clickable. The details of the anchor allocation can also be accessed in the Notices section of the BSE on its website www.bseindia.com.

Key dates for Bharti Hexacom IPO and how to apply?

Watch our detailed video on How to apply for an IPO?

Bharti Hexacom IPO issue opens for subscription on April 3, 2024 and closes for subscription on April 5, 2024 (both days inclusive). The basis of allotment will be finalized on April 8, 2024 and the refunds will be initiated on April 10, 2024. In addition, the demat credits are expected to also happen on April 10, 2024 and the stock will list on April 12, 2024 on the NSE and the BSE. Bharti Hexacom Ltd will test the appetite for such telephone and broadband services in India. The credits to the demat account to the extent of shares allotted will happen by the close of 10 April 2024.