TCIL Plans 15% Stake Sale in Bharti Hexacom

Telecommunications Consultants India Limited (TCIL), a government-owned company, has tweaked its disinvestment plans in Bharti Hexacom, a subsidiary of telecom giant Bharti Airtel. Initially, TCIL aimed to offload a 20% stake, according to a Draft Red Herring Prospectus (DRHP) filed with SEBI in January 2024 . However, according to recent reports, the company will now sell only 15% stake, with the possibility of another 15% divestment in the coming months .

Aligning with Disinvestment Targets

This revised strategy aligns with the Indian government’s disinvestment targets for public sector undertakings (PSUs). A senior official at TCIL confirmed they are adhering to the government’s plan for strategic disinvestment . The first tranche of the 15% stake sale is expected to happen soon, with the remaining 15% divestment planned for an opportune time within the next six months. This phased approach allows TCIL to gauge market response and potentially maximize returns on the sale.

Green Light for Bharti Hexacom IPO

In a positive development for TCIL, Bharti Hexacom, the company in which it holds a 30% stake, has received approval from the Securities and Exchange Board of India (SEBI) for its IPO. This paves the way for TCIL to offload its stake through the public offering process. The IPO is expected to raise ₹1000 Crore for Bharti Hexacom , potentially fueling its future growth plans.

Airtel Relinquishes Right of First Refusal

Interestingly, Bharti Airtel, the parent company of Bharti Hexacom, opted to waive its right of first refusal on TCIL’s stake sale. This decision by Airtel suggests that the company doesn’t see any immediate strategic advantage in acquiring the stake at this point. Analysts believe Airtel might be prioritizing other investments or acquisitions that better align with its current business goals .

Analyst Outlook on Partial Disinvestment

Telecom analysts anticipate the government to generate around ₹4,500 Crore from the sale of TCIL’s initial 15% stake in Bharti Hexacom, based on Bharti Hexacom’s net profit of ₹549.2 Crore in FY 2023 . The partial disinvestment is expected to bring in fresh capital for TCIL, which could be used for business expansion, debt reduction, or strategic investments. Additionally, the move contributes to the government’s broader disinvestment goals aimed at improving the efficiency and profitability of PSUs.

This strategic stake sale by TCIL is expected to be closely watched by investors and industry experts. The success of the IPO and the future trajectory of Bharti Hexacom will likely influence TCIL’s decision to offload the remaining 15% stake.

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