Reliance Industries (RIL) has begun talks to acquire a controlling stake in GTPL Hathway, a leading multi-system-operator (MSO) that dominates the Gujarat market, said people with knowledge of the matter. This follows the announcement of plans by RIL to acquire a majority interest in two of India’s largest cable TV and broadband services providers — HathwayNSE 0.67 % Cable & Datacom and DEN Networks.
“After Hathway and DEN, RIL believes it makes sense to acquire strong regional MSOs, and GTPL is the first such company with strong financials and clean books,” said one of the people cited above. RIL and GTPL Hathway didn’t respond to queries. Hathway owns 37.3 per cent of GTPL Hathway. Through the acquisition of a 51.3 per cent stake in Hathway for Rs 2,940 crore, RIL gets an indirect 19 per cent stake in GTPL Hathway.
“Already, because of Hathway, RIL has got almost 20 per cent stake in the company,” said the person cited above. “The talks are in initial stages and the announcement will be after the open offer.” In accordance with the rules, RIL has announced an open offer for up to 25.64 per cent of Hathway at a price of Rs 82.65 per share, aggregating to a total consideration of Rs 238.37 crore. The move will further boost Mukesh Ambani’s ambitious JioGigaFiber that aims to connect 50 million homes across 1,100 cities.
“Common understanding is that not many shareholders would want to subscribe to the open offer, especially now that RIL is involved,” said another person aware of the development. “So, after the open offer, RIL will make the final offer to pick up majority stake in GTPL Hathway.”
GTPL Hathway has 7.6 million active digital cable subscribers in India. It has a 67 per cent market share in Gujarat with over 4 million subscribers. It is No. 2 in West Bengal with a 24 per cent market share. It is present in over 500 cities in 11 states and works with 20,000 local cable operators.
As of June 30, GTPL Hathway’s broadband subscriber base was 290,000 with a 1.5 million homepass, or homes where it could potentially offer such connections.
On October 17, RIL said it will invest Rs 2,940 crore in Hathway for 51.3 per cent stake and Rs 2,290 crore in DEN for a 66 per cent holding. ET was the first to report on October 16 that RIL was looking to pick up controlling stakes in the two.
