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Siti Cable plans to raise Rs 250 crore via QIP

MUMBAI: Subhash Chandra-promoted Siti Cable Network is planning to raise up to Rs 250 crore (Rs 2.5 billion) from share sale to institutional investors.

The floor price has been fixed at Rs 36.41 per share. The issue has been launched on 27 February.

The indicative deal size is Rs 200 crore (Rs 2 billion) with an option to upsize it to Rs 250 crore (Rs 2.5 billion), according to a source.

Ambit Corporate Finance and Motilal Oswal Investment Advisors are acting as the book running lead managers of the issue.

The fund raising via the the qualified institutional placement (QIP) will help Siti Cable to expand its digital cable TV and broadband footprint. The multi-system operator (MSO) is looking at a total digital subscriber base of 10 million.

Siti Cable’s digital subscriber base stood at 4.85 million, according to data available till 31 December 2014. The broadband subscriber base was at 54,000.

The company has also been acquiring direct points from the local cable operators (LCOs). Its direct point subscriber base as of 31 December 2014 stood at approximately 40,000.

Last year, Siti Cable had got the board approval to raise up to Rs 600 crore ($100 million) through issuance of securities.

In the fiscal third quarter ended 31 December 2015, Siti Cable posted an operating profit (EBITDA) of Rs 50 crore (Rs 500 million), up 9.4 per cent from 45.8 crore (Rs 458 million) in the trailing quarter. In the year-ago period, the EBITDA had stood at Rs 35 crore (Rs 350 million).

Siti Cable’s EBITDA margin for the quarter stood at 22.4 per cent. The net operating revenue saw a muted 1.1 per cent increase quarter-on-quarter, and a 35.20 per cent jump over the earlier year.

Siti Cable’s revenue from broadband increased to Rs 7 crore (Rs 70 million), from Rs 6.2 crore (Rs 62 million) in Q2 and Rs 4.3 crore (Rs 43 million) in Q3 of FY14.

The company has expanded its footprint by entering new markets like Nagpur, Pune, Mysore and Dehradun. It has made inroads in Phase III and IV towns in Kerala, MP, Gujarat, and Maharashtra.

Siti Cable upgraded its existing digital head-end at Bengaluru to Ericsson and Harmonic. In the fiscal third quarter earnings release, the company said that it would keep the STB seeding momentum on through proactive seeding in the existing as well as new cities of Phases III and IV.

Also read:

Siti Cable gets board nod to raise $100 mn via QIP