GTPL Hathway makes a tepid market debut

MUMBAI: Cable TV and broadband service provider GTPL Hathway did not have a wild debut day on the bourses. The shares of the multi-system operator (MSO) did not climb much during the day after opening at the issue price of Rs 170.

Being the first stock to list after the implementation of the Goods and Services Tax (GST), the scrip plunged to a low of Rs 162.25 on Tuesday and then recovered to close at Rs 171.65. During the day, it touched a high of Rs 175.

The stock is expected to trade in a narrow price band for at least the next few days, a media analyst at a broking firm said.

Ortel Communications was the last MSO to list more than two years back. The Odisha-based MSO had a more turbulent debut day on the bourses. After opening at the lower end of its IPO price of Rs 181 on the BSE, the scrip hit the lower circuit of Rs 171.95 during early hours of trade. On the NSE, the scrip opened at a discount of 11.6% at Rs 160.05 apiece. During the day, it touched an intraday high of Rs 168.05 and closed at Rs 162.25 per share.

“Being the first stock to list after the GST, the shares of GTPL Hathway ended marginally higher than the listing price. We are happy that the stock had a combined volume trade of 17 million on BSE and NSE,” said the company’s COO Shaji Mathews.

Set up in 2006, GTPL Hathway has a 67% market share of cable TV subscribers in Gujarat and has a footprint across many parts of the country.

“Gujarat is an important market for broadcasters and advertisers with 5% viewership share from the market on an all-India basis and more than 8% of the Hindi-speaking market (HSM) in India in 2015. Hence, the company accounted for 14% share of the total cable carriage and placement fee market in India in FY16,” ICICI Securities had said in a note.

“Being a regional leader, the company enjoys several content costs advantage with broadcasters. Hence, it operates at a better margin profile against its peers. Going ahead, as the high Arpu generating broadband segment gains momentum, margins are expected to improve further. In addition, monetisation of phases II and III will be further Ebitda accretive,” the report added.

As reported earlier, the IPO of GTPL Hathway was oversubscribed 1.52 times, data from stock exchanges showed. It received bids for 30.86 million shares against the total issue size of 20.21 million shares, excluding the anchor investors’ portion. The portion of shares reserved for institutional investors was subscribed 1.48 times, non-institutional investors such as corporate houses and high net-worth individuals 2.85 times, and retail investors just about fully subscribed.

GTPL Hathway raised Rs 240 crore by issuing fresh shares. The IPO also included an offer for sale of up to 14.4 million shares worth Rs 240 crore by promoters and existing shareholders in the price band of Rs 167–170 a share.

A day ahead of the IPO, GTPL Hathway raised Rs 145.44 crore from anchor investors. The anchor investors include Acacia Banyan Partners, Government Pension Fund Global, BNP Paribas, HTCL-HDFC Prudence Fund, DB International Asia and Vittoria Fund.

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.

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