Asianet Satellite Communication IPO - 7 Things to Know

Asianet Satellite Communication Ltd, a cable and broadband internet service provider based out of Kerala is a market leader in the state and has a wide distribution reach across India also. The company has filed the draft red herring prospectus (DRHP) in December 2021 for an IPO which will be a combination of fresh issue and an offer for sale. Since the DRHP has been only filed towards the end of December, the approval is likely to come in from SEBI only  before the end of March 2022.

7 Important Things to Know About Asianet Satellite Communication IPO

1) Asianet Satellite Communication Ltd has filed for a Rs.765 crore IPO with SEBI which comprises of a fresh issue of Rs.300 crore and an offer for sale of OFS of Rs.465 crore.

The company has been a reputed name in television broadcasting and in internet services for more than 3 decades now and the public issue will empower them to not only monetize the holdings of early investors but also allows Asianet Satellite Communication Ltd to use the stock as a currency for inorganic growth in future.

2) Out of the total issue of Rs.765 crore, let us look at the OFS portion first. The OFS will entail the sale of stocks worth Rs.465 crore by the core early investors viz. Hathaway Investments.

The entire Rs.465 crore of OFS will give an exit to the Hathaway Investments and also expand the free float in the market to allow for better price discovery. 

3) The Rs.300 crore fresh issue portion will be used for a combination of debt reduction and other purposes. In fact, Rs.160 crore out of this fund raising will be used by Asianet Satellite Communication Ltd for repaying high cost long term and short term debt.

Another Rs.76 crore will be allocated towards of funding of working capital needs. The company will also set aside a small portion for general corporate purposes.

4) Asianet Satellite Communication Ltd is one of the leading internet service providers offering broadband internet service and multi-system operators offering digital cable television services in Kerala. In the southern state, the company is famous for broadband and software media programming.

Asianet Satellite Communication Ltd is among the top three fixed-broadband providers in Kerala with an impressive  market share of 19% in fiscal 2021. On the TV platform front, the company currently provides 494 channels including 64 HD channels, on its digital cable platform spread across a very wide and segmented range of genres.

5) The company’s financials have been relatively impressive with top line revenues up 13.12% YoY for the financial year ended March 2021 at Rs.510 crore. This was catalysed by a sharp surge in the number of broadband subscribers of Asianet. For the FY21 quarter, the profits also grew substantially to Rs.31.03 crore. 

6) Asianet Satellite Communication Ltd  is currently owned by the predominant promoter group comprising of Viren Rajan Raheja, Akshay Rajan Raheja, Coronet Investments, Hathway Investments and Bloomingdale Investment and Finance. These promoter entities jointly hold close to 87.67% stake in the company.

The balance is held by the other public shareholders. Asianet is predominantly present in the state of Kerala but now it has operations spread across Tamil Nadu, Karnataka, Telangana, Andhra Pradesh, Odisha and Maharashtra.

7) The Asianet Satellite Communication IPO will be lead managed by Axis Capital and Nomura Financial Advisory and Securities. They will act as the book running lead managers or BRLMs to the issue.
 

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