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Hathway plans $100 million IPO

By SIBABRATA DAS
Indiantelevision.com Team

(8 April 2008 11:15 pm)

MUMBAI: Hathway Cable & Datacom plans to list through a $100 million initial public offering (IPO), says a source familiar with the development.

Hathway will raise $50 million out of this through sale of shares to foreign institutional investors (FIIs), the source adds.

The stake of existing shareholders will fall by 10-25 per cent, depending on the premium that the IPO pricing commands.
Star Group currently holds 22 per cent while private equity major ChrysCapital last year acquired 14 per cent in Hathway for $60 million (Rs 2.65 billion). Founder-promoter Rajan Raheja holds the balance 64 per cent.

"Hathway has got a FIPB (foreign investment promotion board) clearance for Rs 2.17 billion. This is the start of a process for an impending IPO. Hathway will issue shares to the FIIs to raise $50 million out of the proposed $100 million IPO," the source says.

By getting the FIPB nod, Hathway will also have the option of going for a pre-IPO private placement. "The clearance means that Hathway will have that option. But the multi-system operator (MSO) needs to raise more money and so is readying for the IPO," adds the source.

Hathway is in talks to finalise the merchant banker for the IPO. "It has not yet given the mandate to anybody. But the plan is to have the IPO within six months, if the market is conducive," says the source.

Hathway will utilise the IPO proceeds mainly to fund its digital cable expansion plans. "There is competition coming from DTH (direct-to-home). The government is also planning for Cas (conditional access system) extension. The digital set-top boxes need to be subsidised. Hathway will also require investments to make acquisitions," the source adds.