Eyeing 10 mn plus digital subscriber base: Siti Cable

In addition, we are also rolling out broadband in various cities, so this will go both towards phase-3 as well as towards the rollout of the broadband over the period of next one year or so.

Out of the USD 100 million, this is just about Rs 221 crore and for the remaining amount we shall again be raising the funds towards the end of the current year.

Q: What kind of interest did you see from this QIP? Was it oversubscribed? If so, by how much, what was the interest from FII's as well as domestic investors?

A: It was over-subscribed by 10 percent because we wanted to raise Rs 200 crore but because of some internal approval restrictions by various FIIs, we had to get down the minimum quota.

The total money that we have raised is Rs 221 crore. However, interest has been phenomenal both from overseas as well as domestic investors, but the largest amount has been put in by domestic investor. HDFC Mutual Fund has been the biggest investor into this QIP participation. But, the result has been over-valuing.

There have been some apprehensions with the FIIs on the overall speed at which the industry is digitising. Other than that, the interest level seems to be pretty high.

Q: You said you will raise second round of funds at the end of this year. So, would that then conclude the entire USD 100 million or would you look at something similar like what you did now and maybe leave some more room for fund raising later?

A: No, we intend to raise only one more tranche to complete the entire USD 100 million because December ‘15 is the deadline for digitisation, so whatever funding is required, we need to raise the funds closer to that deadline.

Q: How much is your additional fund-raising that we could see and what is the route that you might adopt? Would it be a QIP again?

A: It will be a QIP again because we are already sitting on a high debt, so there is no fund-raising which is planned through the debt position.

We will be raising through QIP and are comfortable with the overall dilution point of view because even after this fund raise that we have done with this QIP, our promoter holding is still about 66 percent in the business.

Q: Wanted to get a little more colour with regards to phase-3 as well in terms of digitisation, what would be your total fund requirement for phase-3 and how much do you expect to gain via market share and which would be the cities that you would be targeting?

A: Our total analogue and digital subscriber base for Siti Cable is about 10.5 million currently and we are at about 4.8 million digital subscriber base. So, this USD 100 million will take us through the entire digitisation by the time we complete the phase-three digitisation by March ‘16, we should be at 10 million plus digital subscriber base. So this will take care of the entire thing and as far as the market share is concerned, whichever cities we are participating, our current market share is 23 percent in digital market.

Q: This QIP entails almost 10 percent equity dilution. And, from what you are saying, it looks like another 10 percent could be on cards. Any reservations from existing share holders in terms of this large scale equity dilution?

A: No, they are quite comfortable because we are the last company to raise funds from outside, because whatever investment has been laid in phase-1, phase-2 digitisation and expansion so far, the entire funding has been done by the promoter.

There has not been any concern, in fact liquid stock has been very low. This is the first time we are going to the market to raise the funds, so there is no such question of any reservation from any one.