MUMBAI: Multi-system operator (MSO) GTPL Hathway, which is hitting the capital market to raise Rs 480 crore, has big plans on the broadband and high definition (HD) side.
The company may also look at acquiring primary points and stakes of its joint venture partners. Over-the-top (OTT) service is also on the radar.
GTPL Hathway MD Anirudhsinh Jadeja said that the company plans to turn at least 20% of its 7.7 million digital cable TV subscribers into its broadband subscribers as well.
The company will switch from micro-Ethernet to GPON technology to provide high-speed broadband to its customers.
The company also plans to convert its entire standard-definition (SD) cable TV subscriber base to HD in the next 2–3 years.
“We already have 7.7 million SD customers. In the coming 2–3 years, we want to convert our SD customer base to HD,” Jadeja said.
He also noted that the company could look at acquiring primary points and its joint venture (JV) partners. GTPL Hathway has 93 JVs and 42 subsidiary companies.
“We can acquire primary points on the cable TV side. We have a lot of JV firms also. We can try and acquire 100% stake,” Jadeja said.
Talking about the broadband opportunity, Jadeja said that Gujarat, Maharashtra and Kolkata will be the primary target markets for the company.
Jadeja pointed out that the earlier growth trajectory for the company was moving from analogue to digital and that going forward, it would be digital + broadband and HD.
GTPL does not need much capex for cable TV. It requires capex for HD.
Almost 90% of GTPL’s revenue comes from cable TV while the remaining 10% comes from broadband. The broadband ARPU is Rs 472 plus tax.
Regarding GST, Jadeja noted that the sector would benefit from the lower tax rate of 18%.
GTPL is also mulling an over-the-top (OTT) service on the lines of DEN Networks and Asianet Communications. Its new Harmonic Headend supports OTT also.
As reported earlier, GTPL Hathway has cut the size of its IPO by 20% to Rs 480 crore. 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.
In FY17, GTPL Hathway posted EBITDA of Rs 300 crore compared to Rs 272 crore a year ago. Revenue stood at Rs 986 crore, up from Rs 845 crore in FY16. Out of GTPL Hathway’s total cable TV universe comprising 8 million subscribers, 7.5 million are digital subscribers.
GTPL was set up in 2006 by Aniruddhasinh 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.