Within a year of its initial public offer, one of the country’s large cable television operator Den Networks is scouting to raise Rs 750 crore. The company’s board has approved raising the fund through various routes including equity (preferential allotment or QIP), quasi equity (warrants/convertible instruments) or through overseas offering of shares or bonds in one or more tranches.
The company that is valued at Rs 2,800 crore, less than 10% of Hathway Cable and over four times WWIL, may have to dilute as much as 20% stake to raise the money as per last traded price of Rs 218. The scrip that has lost almost a fourth of its value over the last one month could be eyeing to raise the funds at a higher valuation that would mean a lower dilution.
The firm had raised around Rs 390 crore through its maiden public float last November. The shares are trading around 12% premium to its issue price.
The company, that took shape through an aggregation model by bringing together small cable operators under a single umbrella and giving them shares, plans to use the funds for digitalising its networks. As per proposed norms, cable operators are expected to shift from analogue networks to a digital system over the next few years. This would require investments to change the equipments that are used to receive and beam the television signals to consumers home.
Den Networks is promoted by Sameer Manchanda, former finance head at NDTV Group who went on to associate with TV18 group by launching IBN and although retains some shareholding in that listed company, went on to float Den.