GTPL Hathway, a leading cable TV and broadband services provider, made a muted debut on the stock exchanges today as the scrip got listed at its issue price of Rs 170. After opening at Rs 170, the stock plunged to Rs 162.00 on the NSE before hitting a high of Rs 175.00. At 1:14 p.m., the scrip was trading down 0.24% at Rs 169.60.
The company’s initial public offering, which was open for subscription between June 21-23, was oversubscribed 1.53 times. The reserved portion of qualified institutional buyers, too, was oversubscribed only 1.48 times and non-institutional investors 2.85 times. The portion set aside for retail investors was subscribed 99%.
The cable TV service provider raised nearly Rs 485 crore through the public issue which was a combination of fresh issue and offer for sale (OFS). The issue consisted of a fresh issue of Rs 240 crore and offer for sale of up to 1.44 crore shares.
The company allocated 85,55,294 equity shares to anchor investors, including Acacia Banyan Partners (30.94 per cent), Government Pension Fund Global (18.56 per cent); BNP Paribas Equity Fund (5.03 per cent); BNP Paribas Long Term Equity Fund (2.92 per cent); BNP Paribas MidCap Fund (5.85 per cent), HTCL-HDFC Prudence Fund (15.13 per cent), and DB International Asia (10.62 per cent) among others.
Although the company garnered Rs 145 crore from anchor investors, it will not get any proceeds from the OFS. However, a majority portion of the proceeds of Rs 229 crore from the fresh issue will be utilized to repay/pre-pay borrowings availed by the company.
Analysts noted that the cable industry was already undergoing a period of weak performance, with disruptive pricing of new entrants. “There is a high probability that the performance may weaken further,” Angel Broking had said in a note.
“Though the company remains one of the few profit-making MSOs, we remain wary of the cable industry structure wherein LCOs hold the key for effective monetisation pass through. There is also a risk of disruption in the broadband business from Jio’s foray into FTTH,” ICICIdirect.com had said in note.