Asianet Satellite Communication Ltd IPO

Upcoming DRHP

IPO Synopsis

IPO Synopsis
Asianet Satellite Communication filed its DRHP with SEBI, worth over Rs.765 crore. The issue consists of a fresh issue of Rs.300 crore and an offer for sale of equity shares worth around Rs.456 crore. The shares are being offloaded by Hathway Investments Pvt Ltd. 
The book running lead managers to the issue are Axis Capital and NOMURA Financial Advisory and Securities. And the promoters are Viren Rajan Raheja and Akshay Rajan Raheja.


Objectives of the IPO
1.    Rs.160 crore of the net proceeds is to be used to repay or prepay any existing debt availed by the company or its subsidiary- Asianet Digital Network Pvt Ltd
2.    Rs.75.04 crore is to be used as expenditure towards expanding their network infrastructure
 

About Asianet Satellite Communication Ltd

Established in 1992, Asianet Satellite Communications is one of the leading internet service providers in the country, that offer broadband internet services and they are also a multi system operator that offers digital cable television services. The operations of the company is mainly concentrated in Kerela and other southern states of India. 
In FY21, the company was among the top three fixed broadband providers in Kerela, with a market share of approximately 19% and 0.28 million wired broadband subscribes in the same market. Their subsidiary- Asianet Digital Networks Pvt Ld was among the top 13 MSOs/HITS operators in India, as of June 2021. 
In terms of their direct fixed line broadband business, the company had home passes of around 0.67 million households in Kerela, as of 30 September 2021. In the same time period, they also had 0.27 million direct subscribers. The company reported a 10.54% CAGR between FY16 and FY21, in fixed broadband subscribers. Asianet currently provides 494 channels which include 64 HD channels. 
Asianet has around 1.14 million active digital cable television subscribers. Their digital cable services have reached 734 cities of Kerela, Telangana, Andhra Pradesh and Orissa. They also have a 100-year lease agreement with an Indian telecommunications provider who has 661 kms of fibre optics present underground in 10 out of 14 districts of Kerela. 
 

Financials

 

Particulars

(In Rs cr)

Q2 ended 30 September, 2021

FY21

FY20

FY19

Revenue

291.3

510

450.90

414

PAT

16.67

31.03

0.3

9.26

EBITDA

77.17

138.1

111

102.53

EPS (In Rs)

1.66

3.08

0.03

0.92

 

Particulars

(In Rs cr)

Q2 ended 30 September, 2021

FY21

FY20

FY19

Total Assets

695.4

676.8

671.9

646.6

Total Borrowings

222.25

206.4

251.7

266.57

Equity Share Capital

100.7

100.7

100.7

100.7

 

Peer comparison (FY21)

Company

Operating Margin (%)

ROCE (%)

Interest coverage (x)

Current ratio

Asianet

28

16

7.1

0.4

BSNL (FY20)

-41.3

-15

-3.7

0.7

Airtel

45.1

11.4

3

0.5

Den

19.8

7.1

NA

1

Hathway

27.4

7.5

18.5

1

KCCL (FY20)

15.1

13.5

34.7

1.1

Nxt Digital

20.8

3.9

1.6

0.3

Jio (FY20)

40.1

15.8

3.2

0.7

SITI

15.8

-13.2

2

0.3

VI

40.4

0

1

0.2


The Key points are-

Key Points

  • Strengths

    1.    Asianet is one of the leading ISP and MSO providers in Kerela, in terms of market share which around 19% in FY21
    2.    They have been investing in the quality and array of services offered by them in order to enhance their speed, reliability and capacity
    3.    Their target market is a very lucrative one as many houses remain under-served and unpenetrated by the broadband services
    4.    They also have an added advantage of a strong brand identity in Kerela and a few other southern states
     

  • Risks

    1.    The market that the company operates in, is very competitive in nature and hence is subject to pricing and market pressures by the competitors. This can adversely affect the financials and business of the company
    2.    The business wholly depends on the subscriptions and the ability to retain the existing customers as well as find new customers. Any decrease in these will materially affect the company
    3.    Their subscribers are very concentrated in the state of Kerela and if they are unable to grow in the state itself, it will adversely affect the business and potential to grow further
     

How to apply for an IPO?

  • Login to your 5paisa account and select the issue in the current IPO section

  • Enter the number of lots and price at which you wish to apply for

  • Enter your UPI ID and click on submit. With this, your bid will be placed with the exchange

  • You will receive a mandate notification to block funds in your UPI app

  • Approve the mandate request on your UPI and funds will be blocked

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