Gujarat-based cable TV and broadband services provider GTPL Hathway Ltd plans to launch its IPO this month. The upcoming IPO will raise around INR600 crore (INR6 billion) through a mix of fresh shares and sales by existing shareholders. GTPL Hathway IPO will be managed by JM Financial Institutional Securities, BNP Paribas, Motilal Oswal Investment Advisors Pvt Ltd and Yes Securities while Link Intime will be the registrar.
“We have received capital markets regulator SEBI’s approval to float an initial public offering. We plan to raise around INR600 crore through IPO in June this year,” the company said in a statement.
GTPL Hathway IPO: Use of Proceeds
GTPL Hathway IPO is likely to fetch nearly INR300 crore to the company through issue of fresh shares. In addition, 19 million shares will be sold through the offer for sale (OFS) route by existing shareholders, promoters and investors.
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The company plans to use majority of the IPO proceeds for repayment/pre-payment of borrowings and INR230 crore have been earmarked for this. The remaining amount will be used for general corporate purposes.
GTPL Hathway IPO: Robust financial performance
According to financial performance disclosed in the draft prospectus, the company registered revenue growth in each of the last four years, although earnings have been volatile. In FY2016, GTPL Hathway achieved a top-line of INR852.1 crore while profits grew to a five year high level of INR69 crore. The robust performance has continued in the first quarter of FY2017 as well with net margin standing at 9.1%.
| GTPL Hathway’s consolidated financial performance (in INR crore) | ||||||
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 | Q1 FY2017 | |
| Total revenue | 359.3 | 455.2 | 579.3 | 632.2 | 852.1 | 218.4 |
| Total expenses | 287.4 | 346.3 | 421.1 | 473.6 | 580.1 | 143.0 |
| Profit after tax | 30.2 | 38.3 | 24.0 | 16.7 | 69.0 | 20.1 |
| Net margin (%) | 8.4 | 8.4 | 4.1 | 2.6 | 8.1 | 9.2 |
GTPL Hathway is a leading regional MSO (multi system operator) in India, offering cable television and broadband services. Nevertheless, it is the leading MSO in Gujarat with a market share of 67% of cable television subscribers in 2015, and second largest player in Kolkata and Howrah in West Bengal with a market share of 24%.
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As of 30 September 2016, GTPL Hathway’s digital cable television services reached 169 towns across India, including towns in Gujarat, West Bengal, Maharashtra, Bihar, Assam, Jharkhand, Madhya Pradesh, Telangana, Rajasthan and Andhra Pradesh. The company has approximately 5.41 million active digital cable subscribers and has seeded around 6.19 million STBs (Set Top Boxes). It also counts 217,823 broadband subscribers among its customers which are primarily based in Gujarat.
