GTPL Hathway IPO to open on June 21: Here's all you need to know

Here are key points about the company and issue that you should know before subscribing:-

1> About the issue

The Rs 480-crore public issue comprises of a fresh issue of Rs 240 crore and an offer for sale of up to 1.44 crore equity shares.

The offer for sale comprises of up to 11.36 lakh shares by Aniruddhasinhji Jadeja (promoter), up to 4.4 lakh shares by Kanaksinh Rana (promoter), up to 54.8 lakh shares by Gujarat Digi Com Private Limited (promoter), up to 72 lakh shares by Hathway Cable and Datacom (promoter) and up to 1.44 lakh shares by Amit Shah (selling shareholder).

2> Purpose of the issue

GTPL will use fresh issue proceeds for repayment of certain borrowings; and general corporate purposes.

The company will not receive any proceeds from the offer for sale by the selling shareholders and the proceeds received from the offer for sale will not form part of the net proceeds. The selling shareholders will be entitled to their respective proportion of proceeds from the offer for sale after deducting their proportionate offer related expenses.

3> Company profile

GTPL Hathway provides cable television and broadband services in 189 towns, including towns in Gujarat, West Bengal, Maharashtra, Bihar, Assam, Jharkhand, Madhya Pradesh, Telengana, Rajasthan and Andhra Pradesh, as of January 2017.

It was incorporated in August 2006 by promoters, Aniruddhasinhji Jadeja and Kanaksinh Rana, through the consolidation of cable service businesses in Ahmedabad and Vadodara. In October 2007, Hathway acquired a 50 percent share of business.

It provides cable television signals to subscribers either directly or through affiliated local cable operators (14,606 as of January 2017).

By the end of 2015, it was the largest multi system operator in Gujarat with a market share of 67 percent and second largest multi system operator in Kolkata and Howrah in West Bengal with a 24 percent market share, according to MPA report.

As of January 2017, the company seeded approximately 6.55 million set top boxes and had approximately 5.69 million active digital cable subscribers with average revenue per user of Rs 252.30 per primary and Rs 72.92 per secondary subscriber, while it had 2,28,217 broadband subscribers with average revenue per user of Rs 472.17.

It has completed roll-out of set top boxes in Phase I, Phase II and Phase III areas and is working towards completing the roll-out of set top boxes in Phase IV areas.

The company is targetting to strengthen HD service offering to offer a differentiated and better quality viewing experience, earn higher ARPUs, become more competitive and help retain subscribers. Since March 2015, it has increased the number of paying HD subscribers from 0.02 million to 0.06 million as of January 2017.

As of January 2017, GTPL has 0.33 million of total digital and analog subscribers as primary subscribers, to whom it provides direct connections, either through relationship with such subscribers, through joint ventures, or through right to use agreements entered into with local cable operators. It aims to increase primary subscriber numbers and benefit from a higher realisation per primary subscriber as compared to secondary subscribers as sharing of subscription fees with local cable operators get eliminated.

Its digital services platform is supported by owned intercity and intra-city optical fiber cable network, which as of January 2017, spanned approximately 5,406 kilometers (on a consolidated basis), and the fiber network leased to company, which spanned approximately 3,615 kilometers (on a standalone basis).

The company plans to upgrade last mile with GPON technology to enable seamless connectivity, higher broadband speed and provide multiple services including OTT with Harmonics hardware and VoD.

The company has 44 subsidiaries.

4> Financials

Its primary source of revenue for cable services is subscription income received from subscribers and placement or carriage income received from carriage fees payable by broadcasters for carrying their channels and placement fees payable by broadcasters for placing their channels on a preferred channel number or position.

GTPL is the only multi system operator in India making consistent profits.

For the year ended March 2016, the company has reported profit of Rs 4.6 crore against Rs 15.5 crore in previous year while revenue increased to Rs 746.2 crore from Rs 627.2 crore YoY.

For nine months period ended December 2016, it has reported profit of Rs 16.3 crore on revenue of Rs 663.46 crore.

In FY13-16, its Operating revenues grew by 23.1 percent to Rs 844.6 crore and EBITDA increased by 35.3 percent to Rs 264.5 crore.

5> Promoters

Aniruddhasinhji Jadeja, Kanaksinh Rana, Gujarat Digi Com Private Limited and Hathway Cable and Datacom Limited are promoters of the company.

Gujarat Digi (erstwhile GTPL Holdings Private Limited), promoted by Aniruddhasinhji Jadeja and Kanaksinh Rana, is authorised to engage in the business of rendering cable, television, network services for business, entertainment, educational, commercial, marketing, amusement purpose.

Incorporated in 1959, Hathway Cable and Datacom (erstwhile Chics Display Services Private Limited) is engaged in the business of undertaking, establishing and operating cable network, satellite channels, television, radio waves and other networks. Hathway is promoted by Akshay Raheja, Viren Raheja, Hathway Investments Private Limited and Spur Cable and Datacom Private Limited.

6> Shareholding pattern

7> Dividend Policy

The company has not declared any dividends during the last five fiscal years other than the dividend of Rs 2 per share declared during fiscal 2016. It currently has no formal dividend policy.

The dividends declared by our company during the last five fiscal years:-

8> Management

Board of directors

Management organisation structure

9> Comparable peers

Hathway Cable & Datacom, Den Networks, Siti Network and Ortel Communications are comparable peers for GTPL Hathway.

10> Risks

Inability to acquire new subscribers, capex for broadband and threat from competition; technology risk, and risk from new tariff order could be risks, according to ICICIdirect report.

Source for images: DRHP