Telecom Operator’s Impressive Listing Reflects Bullish Sentiment in Telecom Sector
Bharti Hexacom (BHL) marked a robust entry into the stock market, with its shares listing at a significant premium of 32% over its issue price, signaling strong investor interest and confidence in the telecom sector.
The telecom operator’s shares debuted at Rs 755.20 on the Bombay Stock Exchange (BSE) and Rs 755 on the National Stock Exchange (NSE), marking a substantial jump from its issue price of Rs 570 per share. The stock surged further to touch a high of Rs 769 on the NSE, reflecting positive sentiment among investors.
At 10:02 am, BHL was trading at Rs 764 on the BSE, up 34% over its issue price, with a combined volume of 21.2 million equity shares exchanged on both the NSE and BSE. Despite a slight decline in the S&P BSE Sensex, BHL’s strong debut underscores investor optimism in the telecom company’s growth prospects.
Bharti Hexacom operates in the communication solutions segment, offering mobile, fixed, and broadband services primarily in Rajasthan and the North Eastern (NE) states of India. With approximately 27 million wireless subscribers across these regions, the company enjoys a dominant position in its markets, particularly in the NE circle where it commands a significant revenue market share (RMS) of 52.7%.
As a subsidiary of Bharti Airtel, BHL benefits from a strong parentage and strategic guidance. Analysts project a positive growth trajectory for the company, driven by factors such as rising average revenue per user (ARPU) and expansion in high-growth markets like Rajasthan and the NE circle.
JM Financial Institutional Securities, in its coverage initiation report, recommended a BUY rating for BHL with a target price of Rs 790, citing the company’s potential for EBITDA growth and structural uptrend in ARPU. The brokerage anticipates BHL’s EBITDA to compound at a rate of 15-17% over the next few years, potentially doubling its stock value.
Despite acknowledging potential concentration risks associated with BHL’s dependence on specific geographic regions and business segments, analysts remain optimistic about the company’s growth trajectory, viewing it as a midcap pure-play on the wireless ARPU growth story within the telecom sector.
