GTPL Hathway Lists At Issue Price

Cable and broadband service provider GTPL Hathway Ltd. made its stock market debut on Tuesday, at its issue price of Rs 170 on the NSE.

The Rs 480 crore initial public offering had been subscribed 1.53 times, but retail participation had remained muted. Qualified institutional buyers (QIBs) and high net worth individual segments were subscribed 1.48 times and 2.85 times respectively.

The offer comprised of a fresh issue worth Rs 240 crore while the remaining Rs 240 crore was an offer for sale of up to 1.44 crore equity shares by existing shareholders. The cable distributor had also raised Rs 145 crore from anchor investors.

The company aims to use the proceeds from its public offer to pare debt and improve its network infrastructure.

Analysts have raised questions over pricing, citing high valuations, but the company’s managing director Aniruddhasinh Jadeja justified the price to BloombergQuint saying its strong presence in existing markets like Gujarat will only help it maintain an edge over other players.

The company's current price to book value multiple stands at 3.1 times, compared to its peer average of 1.5 times. The price to book indicator is used to compare a stock's market value to its book value, higher the value, the more overvalued the stock is considered to be.

Ahmedabad-based GTPL Hathway is a regional multiple system operator (MSO) offering cable television and broadband services. It is the largest MSO in Gujarat, with a 67 percent market share of the cable TV market. It is also the second largest player in Kolkata and Howrah with a 24 percent market share.

Revenue has grown at a compounded annual growth rate of 24 percent while earnings before interest, tax, depreciation and amortisation rose 40 percent, he had added.