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GTPL Hathway makes muted stock market debut

04 July, 2017

GTPL Hathway Ltd, majority-owned by India’s top cable operator by revenue Hathway Cable & Datacom Ltd, made a tepid debut on the stock market on Tuesday with its shares listing at the issue price before rising a tad.

Shares of GTPL started trading on the BSE at Rs 170 apiece, the same as the initial public offering price, stock-exchange data showed. The shares traded between Rs 174.50 and Rs 162.50 before closing at Rs 171.65, giving the company a market capitalisation of Rs 1,930 crore ($298 million).

The 30-share benchmark Sensex closed flat. Shares of Hathway Cable fell 1.4% to Rs 36.10 apiece, after rising as much as 2.7% in the morning when GTPL listed.

GTPL is the 12th company to list on the stock exchanges this year. Seven out of the previous 11 companies have gained on debut.

Avenue Supermarts Ltd, which operates hypermarket chain D-Mart, made the best debut in calendar 2017 with its shares listing at twice the issue price.

Central Depository Services Ltd listed at a premium of nearly 80% last week while its part-owner and stock-exchange operator BSE Ltd had gained 33% on listing earlier this year.

The tepid listing of GTPL comes after its IPO managed to sail through on the final day but with lack of enthusiasm from retail investors. The portion reserved for retail investors fell just short of full subscription.

The company raised Rs 240 crore by issuing fresh shares while selling shareholders mopped up Rs 245 crore.

GTPL had filed its draft red herring prospectus with the Securities and Exchange Board of India on 3 January. It received SEBI’s nod for the IPO on 12 May.

The company became the second cable operator to go public in the past two years and the most valued in the sector.

Ortel Communications Ltd, which counts PE firm New Silk Route (NSR) as a shareholder, had a poor show in its IPO in 2015 and barely managed to scrape past the target after NSR cut the number of shares it sought to sell in the IPO.

The firm had a tepid debut on the bourses but rose a few months later, only to see investors lose interest again after its stock price peaked in October 2015. Currently, it trades at a steep discount to the IPO price.

Ortel’s shares ended at Rs 68.95 apiece compared with the IPO price of Rs 181. Its market value is Rs 210.14 crore, nearly a tenth of GTPL’s valuation.

GTPL’s IPO may affect financials of Hathway Cable. Around one-third of Hathway’s consolidated revenue comes from GTPL and group firms. With the IPO, Hathway Cable’s holding in GTPL is likely to shrink below the threshold where it can call it a subsidiary. As a result, Hathway Cable’s top line would fall.

GTPL Hathway had hired JM Financial Institutional Securities Ltd, BNP Paribas, Motilal Oswal Investment Advisors Pvt. Ltd and Yes Securities (India) Ltd to manage the proposed public issue.

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GTPL Hathway makes muted stock market debut

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