DoT defers its plans to sell the government’s 30 per cent stake in Bharti Hexacom

The Department of Telecommunications (DoT) has deferred its plans to sell the government’s 30 per cent stake in Bharti Hexacom. Bharti Hexacom is a subsidiary of Bharti airtel that offers mobile services in six north-eastern states (excluding Assam) and Rajasthan and has over 15 million customers.

 The government holds 30 per cent stake in Bharti Hexacom through the Telecom Consultants of India (TCIL).

Though the TCIL board had been looking to exit the company for some time, it reconsidered, keeping in mind Bharti Hexacom’s strong performance and potentially higher valuations after the launch of 3G services.

Prior to this, Bharti airtel considered listing its subsidiary to provide an exit option to its minority joint venture partner.

Bharti airtel also has the first right of refusal to this stake. Earlier, when TCIL had expressed its intent to exit Hexacom, the government had invited bids for its stake in 2010, after Deloitte had fixed a base price of Rs 18 billion.

Though five companies had submitted technical bids, only Bharti airtel and Punj Lloyd had submitted financial bids in December 2010. In March 2011, Bharti airtel withdrew its bid, on grounds that the government had delayed the stake sale process.

Thereafter, the sale process was put on hold in May 2011 after the cabinet secretary had requested that the base price be re-evaluated following complaints that it was too low, since Hexacom had a turnover of over Rs 17 billion and profits of over Rs 4 billion in 2010.