Asianet Satellite Communication Ltd IPO

Last Updated on October 17, 2023 by BFSLTeam BFSLTeam

Asianet Satellite Communication Limited started operations in 1992 as an MSO (multi-service operator) for digital cable television services. Today, this company has diversified its business to become one of the prominent Internet Service Providers in Kerala and other South Indian states.

Asianet Satellite Communication Limited is planning to raise funds with an Initial Public Offering. To go ahead with this plan, this company filed a Draft Red Herring Prospectus (DRHP) with SEBI and awaits approval from the regulatory body.

If you are an interested investor, this blog is for you. Keep reading to learn about the important insights of Asianet Satellite Communication Limited IPO from its DRHP. 

About the Company

Asianet Satellite Communication is a prominent Indian Internet Service Provider (ISP) that offers broadband and digital cable television service with Multi System Operators. Headquartered in Kerala, the company holds a 19% market share in this state as per information from FY 2021. According to a CRISIL Report, this company is one of the key ISPs in Kerala and ranks among the top 3 broadband providers in this state. 

Asianet started its operation in 1992 as an MSO providing cable television services. With the growing demand, the company also started to provide broadband services in 2000. Furthermore, owing to the COVID-19 outbreak in 2020, demand for this company’s broadband services increased to break new records. In the fixed broadband market, Asianet held a market share of 15-20% between FY 2015 to FY 2020 in Kerala.

The cable television business is held by the subsidiary Asianet Digital Network Pvt Ltd. It ranks among the top 13 MSO/HIT operators in India. Besides Kerala, the company also operates in the Indian states of Andhra Pradesh, Telangana, Odisha, Tamil Nadu, Maharashtra and Karnataka. This company also ranks 15^th among 468 ISPs on a pan India level with 0.32 million subscribers as per the Asianet Satellite Communication DRHP. 

According to a CRISIL report, this company caters to 30.4 million subscribers in Kerala. Out of this, 12.4 million subscribers are from rural areas whereas 17.9 million subscribers hail from urban regions. 

Coming to finances, the total income of this company grew from Rs. 4,283.15 million in FY 2019 to Rs. 5,154.56 million in FY 2021. Similarly, the profit after tax of the company also increased from Rs. 92.57 million in FY 2019 to Rs. 310.35 million in FY 2021.

IPO Details and Objectives

Asianet Satellite Communication Limited filed its DRHP on December 20, 2021, with the plan to go public. With its upcoming Asianet Satellite Communications Limited IPO, this company plans to raise a total amount of Rs. 765 crore.

Asianet Satellite Communication plans to offer equity shares worth Rs. 300 crore as a fresh issue. With the net proceeds that it earns from the fresh issue, the company will focus on repaying or fully prepaying the debts of this company and its subsidiary. It will also use these funds for business expansion purposes and fulfil general corporate requirements. 

Furthermore, the company will also offer equity shares worth Rs. 465 crores as an offer for sale from selling shareholders. Hathway Investments Private Limited is the only selling shareholder for this OFS. All proceeds from the OFS will be paid to the promoter group and Asianet Satellite Communication will not receive any funds.

The Asianet IPO will also be a complete book-built issue. The company with consultation from the underwriters has set the face value of equity shares as Rs. 10 per share for its upcoming IPO. 

As this company received permission from SEBI to go ahead with its IPO, Asianet Satellite Communication has yet to declare certain information. This includes the total quantity of shares, lot size, price band, and IPO open and closing dates. 

Also Read: How does an IPO work?

Strengths of Asianet Satellite Communication Ltd.

The following details highlight the strengths of this company which makes Asianet Satellite Communications Limited IPO worth investing. 

• This company is among the leading MSOs and ISPs with an impressive market share of the digital cable television and fixed-line broadband markets in Kerala. 
• It uses advanced technology and infrastructure to provide efficient services. 
• Asianet Satellite Communication Limited holds a strong brand identity in the market it operates. This enables the company to ensure brand loyalty among existing subscribers and also cater to new ones.
• The company is also run by an experienced management team which ensures strong corporate governance. 

Risks Involved

Besides the above strengths, Asianet Satellite Communication Limited is also exposed to certain risks. These risks can hamper the business, cash flow and operations of this company. 

• This company is involved in certain material legal proceedings related to adjusted gross revenue. 
• Asianet Satellite Communications Limited runs in a competitive market exposing it to pricing and other pressures. Subscribers might opt for its competitors’ services if they receive a better deal. 
• This company functions on cables drawing power from electricity poles installed by Kerala State Electricity Board and Thrissur Corporation Electricity Department. To keep receiving electricity, the company must renew its contracts with these authorities. Failure to do so will disrupt its power supply, resulting in a loss of revenue. 

Also Read: IPO investment strategy

Summary

The aforementioned information about the company will help you make an informed decision on Asianet Satellite Communication Limited’s IPO. Before investing, you should thoroughly check the DRHP and other regulatory filings of this company to understand its business model, finances, positives and negatives. Also, assess your risk appetite and return expectations.

Asianet Satellite Communication Limited is a prominent internet service provider and cable TV operator in Kerala. If this company’s upcoming IPO interests you, consider exploring our website to know more. You can also start your investment journey by opening a Demat and trading account with us. 

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