Hathway Cable and Datacom IPO

ngnm · #1 8th February 2010, 01:34 PM

How is the Hathway IPO??? Is it good to subscribe??? Please advise

guru-dhiru · #2 10th February 2010, 09:54 AM

http://business.rediff.com/report/20...ff-hathway.htm

Quote:

Zee Turner, TV channel distribution joint venture between the Turner Group and the Essel Group, has said it would stop Hathway Datacomm from airing 33 channels, since Hathway had defaulted on its payments to air these.

Quote:

Zee Turner also said that in the Red Herring Prospectus filed with authorities, Hathway has mentioned its total subscribers to be nearly two million (while advertising that they had eight million subscribers), whereas they declared only about 400,000, thus concealing a large portion of their subscriber base.

Alchemist · #3 10th February 2010, 06:48 PM

I am not sure about Hathway Cable and Datacom IPO and so will be avoiding it.

The company is currently making losses and is likely to continue for next 1-2 years.

If one uses the EV/EBITDA metric, the IPO is priced at around 20-25 times FY2011 EBITDA.

I wouldn't mind paying such valuations for a company, if it's likely to show strong growth for the next 3-5 years.

However, I am not sure if cable distribution industry will show any spectacular growth in years to come.

Quote:

Third, the growth of the industry itself may not be that encouraging. A recent report from PricewaterhouseCoopers indicates that the number of TV households would grow at just 2.7 per cent annually over 2009-13 to 135 million. Further, the report states that the number of cable households would grow from 71 million in 2008 at just 2.4 per cent annually from 2009 to 80 million by 2013.

Source.

My guess is the that IPO will get subscribed at lower end of the price band and may list at 4%-5% premium.

sudhashbahu · #4 25th February 2010, 03:55 PM

Quote:

Originally Posted by Alchemist

My guess is the that IPO will get subscribed at lower end of the price band and may list at 4%-5% premium.

You were right Alchemist-ji.

Listed at 250 (4% premium. IPO price was 240) and then sank like a stone. Closed the first day at 207.65.

Another wealth destroyer. Good thing most people on the forum skipped it.

sudhashbahu · #5 13th December 2010, 09:14 AM

CMP today (13/12/2010) is Rs 161.00.

The company made net losses for the past 5 years (tough operating profit was positive).
ROCE and RONW are negative.

Operating profit for March'10 was Rs 68.2 Cr but interest outgo was a massive 50.91 Cr.

I wonder why the company is trading at high valuation.