Bharti Hexacom Ltd IPO

Established Leadership and Large Customer Base in its area of operations.

Presence in Markets with High Growth Potential.

Strong Parentage and Established Brand.

Building a Future Ready Network .

Extensive Distribution and Service Network .

Experienced Management Team.

We derive our revenues from providing mobile telephone services in Rajasthan and the North East circleand any unfavourable developments in such regions could adversely affect our business, results of operations and financial condition.

There are outstanding legal proceedings involving our Promoter, in addition to our Company. Any adverse outcome in any of these proceedings may adversely affect our reputation, business, financial condition and results of operations.

The Offer shall be undertaken under Regulation 6(2) of the SEBI ICDR Regulations.

As of December 31, 2023, we had contingent liabilities which have not been provided for in our Restated Financial Information and could adversely affect our business, financial condition and results of operations.

Reduction in revenue we earn for our telecom services, due to regulatory ceilings on pricing, or owing to pricing pressure, reduction in average revenue per user ("ARPU"), may have an adverse effect on our business, financial condition, results of operations and prospects.

We have incurred significant indebtedness, and we must service this debt and comply with any lenders` covenants to avoid defaulting on our borrowings and refinancing risk. Any default may adversely affect our business and profitability.

We require significant capital to fund our capital expenditure and if we are unable to raise additional capital, our business, financial condition and results of operations could be adversely affected.

The average cost of acquisition of Equity Shares by the Selling Shareholder may be less than the Offer Price.

Any change in our relationship with our Promoter, Airtel and its affiliates, may adversely affect our reputation, business, operations, financial condition and results of operations.

We have been, and continue to be, involved in material legal proceedings.

We will not receive any proceeds from the Offer for Sale. The Selling Shareholder will receive the net proceeds from the Offer for Sale.

There was only one disciplinary action taken against our Promoter by the National Stock Exchange of India Limited in the past.

Our Statutory Auditors have included certain remarks in connection with the Companies (Auditor`s Report) Order, 2020/ Companies (Auditor`s Report) Order, 2016.

Our non-convertible debentures ("NCDs") are listed on the NSE and we are subject to rules and regulations with respect to such listed NCDs. Additionally, as a `high value debt listed entity`, we are subject to additional compliances under the SEBI Listing Regulations. If we fail to comply with such rules and regulations, we may be subject to certain penal actions, which may have an adverse effect on our business, results of operations, financial condition and cash flows.

We have incurred losses in the past and we may not achieve or sustain profitability in the future.

A large part of our passive infrastructure is not owned by us and we rely on third party providers for such infrastructure. We cannot assure you that such passive infrastructure will be adequately maintained or that our strategy for the continued upgrade or rollout of our network will be implemented in a timely manner or on a cost-effective basis.

We rely on sophisticated billing, credit control and customer verification systems, any failure of which could lead to a loss of income and customers.

The Offer Price, market capitalization to revenue from operations multiple and price to earnings ratio based on the Offer Price of our Company, may not be indicative of the market price of the Equity Shares on listing.

We rely significantly on our information technology systems for our business and any inadequacy or security breach in such systems could adversely affect our business, financial condition and results of operations.

If we do not continue to provide telecommunications or related services that are technologically up to date or keep up with changing consumer preferences, we may not remain competitive, and our business, financial condition and results of operations may be adversely affected.

We are exposed to certain risks in respect of the development, expansion and maintenance of our mobile telecommunications networks. Failure to address these risks and control our operating costs may have an adverse effect on our business and profitability.

Churn rate in the mobile telecommunications industry in India is high (Source: CRISIL Report), and we cannot assure you that we will be able to retain all our existing customers or that we will be successful in customer additions, which may have an adverse effect on our business, financial condition and results of operations.

We face intense competition that may reduce our market share and lower our profits.

Our ability to grow our business and our number of customers is dependent on the quality and quantity of spectrum owned by us.

Poor quality of network, including redundancies and disaster recoveries, can adversely affect our business, financial condition and results of operations.

We are dependent on a limited number of vendors to supply critical network and other equipment and services.

In the regulated telecommunications market, our licenses and spectrum allocations are subject to terms and conditions, ongoing review and varying interpretations, each of which may result in modification, suspension, early termination, expiry on completion of the term or additional payments, which could adversely affect our business, financial condition and results of operations.

We are dependent on our Key Managerial Personnel, Senior Management and our employees, and the loss of, or our inability to hire, retain, train, and motivate qualified personnel could adversely affect our business, financial condition and results of operations.

Adverse change in credit ratings assigned to us may affect our ability to raise funds for future capital requirements.

Our business is vulnerable to fluctuation in interest rates.

Our Promoter exercises significant control over our Company and will continue to do so after completion of the Offer, which may limit your ability to influence the outcome of matters submitted for approval.

We may be unable to adequately protect intellectual property that we use and may be subject to risks of infringement claims.

Non-receipt of payment from our customers may adversely affect our business, financial condition and results of operations.

Environmental and health regulations may impose additional costs and may affect our business, financial condition and results of operations. In addition, concerns about health risks to customers stemming from mobile telecommunications equipment may reduce the demand for our services.

We may be unable to protect our rights to the land on which our active network infrastructure is placed.

Our Promoter may have interest in entities which are in businesses similar to ours. We may also offer services which are similar to those offered by our Promoter.

We have used information from the CRISIL Report, which we have commissioned and paid for purposes of confirming our understanding of the industry exclusively in connection with the Offer and any reliance on such information is subject to inherent risk.

Certain statutory and regulatory licenses and approvals are required for conducting our business and any failure or omission to obtain, maintain or renew these licenses and approvals in a timely manner, or at all, could adversely affect our business and results of operations.

We do not own our retail outlets or small format stores. We also do not own the property on which our Registered Office and Corporate Office is situated. Any termination or failure by us to renew the lease and license agreements in connection with these properties, could adversely affect our business and results of operations. Moreover, many of the lease and license agreements entered into by us may not be duly registered or adequately stamped.

Negative publicity could damage our reputation and adversely impact our business, financial condition and results of operations.

Our business depends on the delivery of an adequate and uninterrupted supply of electrical power and fuel at a reasonable cost.

Significant differences exist between Ind AS used to prepare our financial information and other accounting principles, such as U.S. GAAP and IFRS, which investors may be more familiar with and may consider material to their assessment of our financial condition.

Our insurance coverage may not be sufficient or may not adequately protect us against all material hazards, which may adversely affect our business, financial condition and results of operations.

We have in this Red Herring Prospectus included certain non-GAAP financial measures and certain other industry measures related to our operations and financial performance. These non-GAAP measures and industry measures may vary from any standard methodology that is applicable across the telecommunications industry, and therefore may not be comparable with financial or industry related statistical information of similar nomenclature computed and presented by other companies.

We may enter into related party transactions in the ordinary course of our business and we cannot assure you that such transactions will not have an adverse effect on our results of operation and financial condition.

A failure of our internal controls over financial reporting may have an adverse effect on our business, results of operations, cash flows and financial condition.

Our ability to pay dividends in the future will depend on our earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of our financing arrangements.

We have availed short term unsecured working capital loans from scheduled banks, which can be recalled by lenders at any time.

We are unable to trace some of our historical corporate records including minutes of the Shareholders meetings and corresponding form filings. We cannot assure you that no legal proceedings or regulatory actions will be initiated against our Company in the future in relation to these matters, which may impact our financial condition and reputation.

Any failure to comply with sanctions administered by the United States or other governments could adversely affect our business and reputation.