Private-equity firm Providence Equity Partners is increasing its stake in cable operator Hathway Cable & Datacom Ltd by infusing Rs 150 crore in the company along with the promoter Raheja Group.
The PE firm will invest Rs 110 crore in the company while the rest will be invested by promoter group entity Hathway Investments Pvt Ltd for a total 3.55 per cent stake.
Providence will pick up additional 2.6 per cent with this transaction, taking its total stake in the company to 12.5 per cent. The promoter group’s stake after the deal will cross 50 per cent.
The shares are being allotted at Rs 284 per unit. The Hathway scrip closed at Rs 286.7, up by 1.04 per cent giving the company a market capitalisation of Rs 4,105.54 crore.
Providence Equity Advisors Mauritius Ltd and Macquarie Bank acquired 17.3 per cent stake in Hathway Cable from media giant News Corp for Rs 358 crore or around $72 million through secondary market transactions last year. The two picked up the shares for Rs 145 a unit.
Other existing investors in the cable operator include KAUP Capital’s Infrastructure India Holding Fund, which holds 3.9 per cent, besides Norway’s sovereign wealth fund Government Pension Fund Global and hedge funds such as Tree Line Asia and Route One.
Another recently deal in the cable segment was when DEN Networks Ltd raised $110 million (Rs 600 crore) from an arm of Goldman Sachs.
“The compulsory digitisation mandate will lead to digitisation of cable TV services across India over the next two‐three years. Converting its existing analog subscriber base on the digital platform will provide Hathway a huge opportunity to increase subscription revenue due to lower under‐declaration and higher ARPU. Hathway’s digitisation progress is on track and the company is looking to build on to its broadband subscriber base as well,” said an Edelweiss Securities report on the company with target of Rs 347.
(Edited by Joby Puthuparampil Johnson)