GTPL Hathway Ltd, majority-owned by India's top cable operator by revenue Hathway Cable & Datacom Ltd, saw its initial public offering (IPO) fully subscribed on the final day of the issue on Friday.
The issue of 20.21 million shares, excluding the anchor investors’ portion, received bids for 30.86 million shares, or 1.52 times the issue size, stock-exchange data showed.
The quota of shares reserved for institutional buyers was subscribed nearly 1.5 times. The portion set aside for non-institutional investors, such as corporate houses and wealthy individuals, was subscribed almost three times.
The portion earmarked for retail investors, whose total bid value cannot exceed Rs 2 lakh, was just about fully subscribed.
Gujarat-based GTPL Hathway is looking to raise Rs 240 crore by issuing fresh shares. The IPO also includes an offer-for-sale of 14.4 million shares worth Rs 245 crore by promoters and existing shareholders.
The company is seeking a valuation of as much as Rs 1,915 crore ($300 million) through the IPO.
On Tuesday, the company raised Rs 145 crore by selling 14.4 million shares to a bunch of anchor investors, including private equity firm Acacia Banyan Partners and Norway’s Government Pension Fund Global, at the upper end of the Rs 167-170 price band.
The cable operator will use Rs 228.93 crore of the net proceeds to repay debt and the rest for general corporate purposes.
GTPL filed its draft red herring prospectus with the Securities and Exchange Board of India (SEBI) on 3 January. It received SEBI’s nod for the IPO on 12 May. VCCircle had first reported in August 2016 that GTPL had hired JM Financial, Motilal Oswal and BNP Paribas as merchant bankers for an IPO.
Following the listing, GTPL will become the second cable operator to go public in the past two years and the most valued in the space.
The IPO of Ortel Communications Ltd, which counts PE firm New Silk Route among its shareholders, did poorly in 2015, barely scraping past the target after New Silk Route reduced the number of shares it sought to sell in the IPO.
After the tepid debut, the stock rose a few months later, only to see investors lose interest eventually. It is currently trading at a discount to the IPO price. Its price-to-earnings ratio is roughly 17.
GTPL’s listing may affect the financials of Hathway Cable. Around a third of Hathway’s consolidated revenue comes from GTPL and group firms. Following the IPO, Hathway Cable’s holding in GTPL is likely to shrink below the threshold where it can call it a subsidiary. As a result, Hathway Cable’s top line is likely to fall.