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ChrysCap will be pocketing returns of 48%-63% on its investment while Morgan Stanley will generate returns of 13%-25%.
ChrysCapital and Morgan Stanley are making a part-exit from Hathway Cable and Datacom Limited, one of the country’s top cable television service provider, with modest gains on their less than three-year-old investment.
At the IPO price band of Rs 240-265 per share, ChrysCap will be pocketing returns of 48%-63% on its investment made in May 2007, while Morgan Stanley, that invested in June 2008, will generate returns of 13%-25%.
The average cost of acquisition of shares stands at Rs 162 for ChrysCap while it is Rs 213 a piece for Morgan Stanley.
The issue, which is being managed by UBS, Kotak Mahindra and Morgan Stanley, opens for subscription on Tuesday. The total size of the issue is up to Rs 735 crore of which Rs 580 crore will go to Hathway while the rest will be pocketed by the private equity investors.
At this price, the company is seeking a market cap of Rs 3,786 crore ($815 million) at the upper end of the price band. This will value it around 50% above PE-backed Den Networks-- currently the largest cable TV operator in terms of market value-- and much above Zee Group’s WWIL.
ChrysCap and Morgan Stanley currently hold 13.3% and 3.8%, respectively in the company which will drop to 6.4% and 2.9%, post the IPO. Other large investors in Hathway include media giant Newscorp that has around 20% stake.
Hathway intends to use around half of the money for customer acquisitions besides investments for set top boxes and other infrastructure and some debt repayment. The firm had revenues of Rs 672 crore during 2008-09 with net loss of Rs 62 crore.
