See Hathway going through despite high valuations: Udayan

Excerpts from Bazaar on CNBC-TV18 Watch the full show » RELATED NEWS Hathway Cable IPO opens, gets anchor investors

The initial public offering (IPO) of Hathway Cable and Datacom, a cable television services provider, has opened for subscription today. The price band is at Rs 240-265 per share.

Udayan Mukherjee, Managing Editor of CNBC-TV18 believes the issue will go through despite its stretched valuations. "You could see anchor investors having put in the money at Rs 240 and this issue will get done. It may seem optically expensive but when you like a space you pay a bit of a premium to it to get invested because there is choice of only 3-4 stocks out there."

Here is a verbatim transcript of Udayan Mukherjee's comments on CNBC-TV18. Also see the accompanying video.

I was quite surprised at DEN's post listing performance because it did not get subscribed very well but it still had held on close to its issue price.
My sense is that, increasingly, people are beginning to see some kind of value or some investors are in the distribution space because it's gone through two years of investment phase, where no player has made money. But maybe we are coming to that tipping point as digitization picks up that this space will finally start delivering returns.

I am not talking about Hathway alone. It could mean good things for DishTV, WWIL, even DEN - all the listed players in this space. At some point the tipping point will be hit and they will start making money.

A lot of longer term investors actually fancy this space which is why DEN hasn't corrected. It corrected on the first day of listing but then got back to Rs 190.

Hathway too in that marketcap that they want of between Rs 3,500-3,800 crore seems a bit on the expensive side even if they deliver Rs 300 crore of EBITDA that people are talking about for next year, it might seem a bit stretched compared to some of its peers.

But you could see anchor investors having put in the money at Rs 240 and this issue will get done. It may seem optically expensive but when you like a space you pay a bit of a premium to it to get invested because there is choice of only 3-4 stocks out there.

I don't know about the market because the market will play an important role in all these investment decision now as you saw with NTPC. But market aside, Hathway will get done despite slightly stretched valuations.