Private equity firm Acacia Banyan Partners and Norway's Government Pension Fund Global are among the anchor investors which have bet on GTPL Hathway Ltd ahead of its initial public offering that opens on Wednesday.
BNP Paribas, DB International Asia Ltd and Vittoria Fund SR Limited Partners are also among the foreign investors which took part in the anchor allotment on Tuesday.
Anchor investors are institutional investors who accept a one-month lock-in period for a sizeable allocation of shares and support a public offering. Their participation highlights investors’ confidence in an IPO and sets a benchmark for the investor community at large.
GTPL Hathway, which counts Hathway Cable & Datacom Ltd as a key shareholder, raised Rs 145 crore ($22 million) by selling 14.4 million shares to the anchor investors at the upper end of the Rs 167-170 price band.
Acacia acquired 2.64 million shares for Rs 45 crore, while the Norwegian pension fund bought 1.58 million shares.
The anchor investors also included HDFC Mutual Fund.
GTPL Hathway is seeking a valuation of as much as Rs 1,915 crore ($300 million) through the IPO that closes on Friday. The public offering comprises a fresh issue of shares worth Rs 240 crore, besides a sale of 14.4 million shares worth Rs 245 crore by promoters and existing shareholders.
At the upper end of the price band, the IPO will result in a stake dilution of roughly 26% on a post-issue basis.
The Gujarat-based multi-system operator will use Rs 228.93 crore of the net proceeds to repay debt and the remaining for general corporate purposes.
GTPL filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on 3 January. It received SEBI’s nod for the IPO on 12 May.
While filing the draft documents, the firm said it plans to raise Rs 300 crore via the public float.
VCCircle first reported in August 2016 that GTPL had hired merchant bankers for an IPO of around Rs 400-500 crore ($60-75 million).
GTPL Hathway will become the second cable operator to go public in the past two years and, possibly, the most valued in the space.
Ortel Communications, which counts PE firm New Silk Route (NSR) as a shareholder, had a poor show in its IPO and barely managed to scrape past the target after NSR cut the number of shares it sought to sell in the IPO.
The firm had a tepid debut on the bourses but rose a few months later only to see investors lose interest after its stock price peaked in October 2015. Currently, it trades at a discount to the IPO price.
Ortel is trading at roughly 17 times the price-to-earnings ratio based on the current stock price. Its market capitalisation is Rs 208.61 crore.
GTPL’s IPO may affect financials of Hathway Cable. Around one-third of Hathway’s consolidated revenue comes from GTPL and group firms. With the IPO, Hathway Cable’s holding in GTPL is likely to shrink below the threshold where it can call it a subsidiary and its top line would fall.
GTPL Hathway has hired JM Financial Institutional Securities Ltd, BNP Paribas, Motilal Oswal Investment Advisors Pvt. Ltd and Yes Securities (India) Ltd to manage the proposed public issue.
For more details on the GTPL IPO, click here.
