MUMBAI: Multi-system operator GTPL Hathway has cut the size of its initial public offering (IPO) by 20% to drum up demand among investors in a sector that has seen some beating.
The promoters of GTPL Hathway strategically decided on 25% dilution rather than 30%. The company is profitable and on an expansion spree.
The new move will slash the overall issue size to Rs 480 crore, down from the initial plan of raising Rs 600 crore.
The post-money valuation of GTPL Hathway will be Rs 1,900 crore rather than Rs 3,000 crore as per the original plan.
The IPO price has been fixed at Rs 170 in the upper end and Rs 167 at the lower band. The issue will open on 21 June and close on 23 June.
The IPO will comprise an offer for 14.4 million shares by promoters and shareholders, amounting to Rs 240 crore. The initial plan was to offer 18 million shares for sale, which would have amounted to Rs 300 crore.
The offer for sale will be equally split between the promoters of Hathway Cable & Datacom and those of GTPL. Of the promoters’ 98.95% stake in the company, 50% is held by Hathway Cable & Datacom, 29.11% by Gujarat DigiCom, 14.62% by Aniruddhasinh Jadeja, 5.21% by Kanaksinh Rana and 1.05% by Amit Shah.
The fresh issue of shares will be worth Rs 240 crore, down from Rs 300 crore earlier planned.
Ortel Communications was the last MSO to list on the bourses a little over two years back. The IPO managed to sail through after private equity firm New Silk Route slashed the number of shares it sought to sell in the IPO. The stock has seen a sharp fall and Ortel’s current market cap is just Rs 207 crore.
Hathway Cable & Datacom’s market cap is Rs 3,317 crore. While the market cap of Siti Networks is at Rs 2,629 crore, DEN Networks is at Rs 1,600 crore.
In FY17, GTPL Hathway posted EBITDA of Rs 300 crore compared to Rs 272 crore a year ago. Revenue was at Rs 986 crore, up from Rs 845 crore in FY16.
Out of GTPL Hathway’s total cable TV universe of 8 million, 7.5 million are digital subscribers.
GTPL was set up in 2006 by Aniruddhasinhji Jadeja and Kanaksinh Rana. The Ahmedabad-based company diluted 50% stake to Rajan Raheja Group-backed Hathway Cable & Datacom in 2008. Since then, the MSO has expanded in size and spread to many parts of the country.
JM Financial Institutional Securities, BNP Paribas, Motilal Oswal Investment Advisors and Yes Securities are appointed to manage the public issue.