GTPL HATHWAY LTD.

A) ABOUT THE COMPANY:

 Logo:

 Tagline: “Connection Dil Se”

 GTPL stands for: Gujarat Tele Link Private Limited
 Hathway owns 37.3 per cent of GTPL Hathway.
 GTPL Hathway Limited is the second largest Multi-Service Operator (MSO) in India
engaged in Cable TV distribution and high-speed broadband service distribution.
 Reaching an estimated 10.8+ million households in over 1000+ towns across 15
states in India.
 The company is the largest Multi-Service Operator (MSO) in Gujarat and is the
second-largest player in the cable market of West Bengal.
 Incorporated in: 2006
 The Cable TV services are provided by a main state-of-the-art head-end set-up in
Ahmedabad and four support headends around India
 It is spread in a network of roughly 20000 kilometers of Optical Fibre Cable reaching
over 500 cities and 8.7 million households.
 Number of employees: 2865
 Key Highlights:

Growing Subscriber Base

• ~2x growth in last 5 years for CATV
• ~3.6x growth in last 5 years for Broadband

Growth
• ~24% CAGR growth in Revenue in last 5 years
• ~28% CAGR growth in EBITDA in last 5 years
 Spread across India in terms of type of connection provided:

Consistent Performance
• PAT Positive for last Consecutive 5 years
• “IND A+/Stable” Rating by ‘India Ratings’

Free Cash Flow

• Positive FCF generated over past 5 years

Dividend Results
•Consistent Dividend Paying history of last 5 years
• 40% Dividend for FY21

Debt Status
• “Net Debt Free” Firm

 Key Strengths of the firm:

1) Leadership Levels across India:
- It is the no. 2 Multi Service Operator (MSO) in India, no. 1 in Gujarat and no.
2 in West Bengal.
- Holds significant presence in Maharashtra with penetration into almost 1.5
million households.
2) Trusted Partner:
- Partnership with 29,500+ Local Cable Operators (LCOs)
- Bottom-up company thus shows transparency in its approach.
- Provides Ease-of-Business via multiple Apps in Vernacular Languages.
- Provides to the LCOs and subscribers with “Digital Payment Options”.
 3) High end Technology and Infrastructure:
- Puts into use the State-of-the-Art Next Generation Video Headend System
from Harmonics Inc., USA.
- Uses High performance Exadata Database from Oracle.
- State-of-the-Art BNG solutions from Nokia for high speed FTTX broadband.

B) BUSINESS MODEL
GTPL Hathway is India’s second largest Multi-service Operator (MSO) in cable TV Distribution
and high-speed broadband service. GTPL Hathway now operates in more than 15 states
penetrating 10.8+ million households in India. The Company is a market leader in Gujarat
owing 67% of the market share and no. 2nd in West-Bengal with 24% market share. The
Company is aggressively expanding in southern states like Maharashtra, Telangana, Andhra
Pradesh and Tamil Nadu with 50,000+ laid down Optical fibre cable.

GTPL Hathway Product Portfolio majorly includes:

Community Access/Antenna Television: CATV currently has a subscriber base of 8.05

million with 7.35 million paying subscribers. The Company has a 100% prepaid business
model in this segment with 80% collection coming through digital mode. The Revenue from
CATV stood at 2715 million at the end of H2FY22. The Company aims to Complete its hard
launch of its Hybrid boxes which gives OTT by taking wi-fi as input somewhere near
November, 2022. Unlike Smart TVs which have inbuilt OTT applications, this hybrid box will
provide OTT services to non-smart Tv users also.

Broadband Services: In Broadband segment, the company has a subscriber base of 735K
with 4.20 million home passes at the end of H2FY22. The Average Revenue Per user (ARPU)
for broadband is Rs. 440 per month. The company is witnessing 10% Q-o-Q growth in ISP
Revenue. Going ahead the company aims at capitalizing on the growth opportunity as
wireless broadband market in India is tapped only by 6% compared to 70% in eurozone and
80% in Japan. In technological front, the Company makes use of GPON technology which
bring seamless Connectivity, higher broadband speed and OTT Capabilities.

The EPC contract: which aims at connecting 3700+ gram panchayats and towns brings a
fair share of revenue for the company. The company collected 100 crores through EPC and
67 crores from carriage, placement and marketing for H2FY22. Revenue proceeds from
yearly Operation and Maintenance will be around 57 crores.

For Expenditure part: the company has incurred a capex of 8 crores for H2FY22, out of 80
crores, 35 crores were for CATV and 45 crores was for broadband services. Moreover, it has
a target of 400 crores for the year FY22. The company aims carry on its growth trajectory by
maintain a 450 ARPU with 40% EBITDA margin. Majority of expenditure is incurred on pay
channel cost i.e., somewhere near 45-50 % of the Revenues. The second major cost in
company’s business model is Operating, selling and administration expense.
Sr. No. REVENUE BREAKUP Mar 17 Mar 18 Mar 19 Mar 20 Mar 21
4,489.7 10,308.0 10,712.0
1 Subscription CATV 7 5,799.17 7,332.10 8 3
2 Revenue from EPC contract 0 0 0 6,509.80 4,093.10
1,279.1
3 Broadband ISP 4 1,424.97 1,441.83 1,674.25 2,791.96
Placement / Carriage / Marketing 2,375.0
4 Incentive 8 2,566.46 2,609.83 4,067.84 5,975.44
5 Activation/ Installation Charges 750.89 938.82 938.88 1,132.21 924.04
6 Other Operating Income 21.30 18.74 28.87 53.22 91.10
7 Other Income 182.13 164.53 106.71 95.44 82.3
9,098.3 10,912.6 12,458.2 23,840.8 24,669.9
  Total Revenue 1 9 2 4 7

NOTE:
1) The firm got the EPC contract from 2020 onwards. Thus, Revenue from EPC contract has been put as
0 for the years 2017, 2018, 2019.
2) Other Income includes: Consultancy Income, Equipment Lease Income, Advertisement Income,
Point on sales of set top box

Revenue Breakup over the Years

Mar 21

Mar 20

Mar 19

Mar 18

Mar 17

0.00 5,000.00 10,000.00 15,000.00 20,000.00 25,000.00 30,000.00

Subscription CATV Revenue from EPC contract

Broadband ISP Placement / Carriage / Marketing Incentive
Activation/ Installation Charges Other Operating Income
Other Income
 Revenue Breakup for 2021
4% 0%0%
24%

43%

11% 17%

Subscription CATV Revenue from EPC contract

Broadband ISP Placement / Carriage / Marketing Incentive
Activation/ Installation Charges Other Operating Income
Other Income

C) SHAREHOLDING PATTERN AND IT’S ANALYSIS

Shareholding Pattern for 2021

0.15

0.01

0.1

0.75

Promoter  FII DII Public Others

 Mar- Jun- Sep- Dec- Mar- Jun- Sep-
 
20 20 20 20 21 21 21
Promoters - 75 75 75 75 75 75 75
Hathway Cable and Datacom
37.32 37.32 37.32 37.32 37.32 37.32 37.32
Limited
Pruthvi Steel Private Limited 21.09 21.09 21.09 21.09 21.09 21.09 21.09

Anirudhsinh Noghubha Jadeja 11.78 11.78 11.78 11.78 11.78 11.78 11.78

Kanaksinh Bhurubha Rana 4.17 4.17 4.17 4.17 4.17 4.17 4.17
Jio Content Distribution Holdings
0.64 0.64 0.64 0.64 0.64 0.64 0.64
Private Limited

FIIs - 11.67 11.18 10.76 10.48 9.92 9.9 10.16

Acacia Banyan Partners 3.41 3.41 3.41 3.41 3.41 2.93 2.93

Government Pension Fund Global 2.53 2.53 2.53 2.53 2.53 2.53 2.53

Parvest Equity India 1.57 1.21          

Acacia Conservation Fund Lp           1.08 1.08

Acacia Partners Lp           1.03 1.03

DIIs - 0.06 0.09 0 0.52 0.52 0.52 0.52
Vantage Equity Fund              
Public - 13.27 13.73 14.24 14 14.56 14.58 14.32
Ashish Kacholia              

Analysis:

Shareholding Pattern for last 4 Years

43160

43525

43891

44256

Promoter  FII DII Public Others

From the last 7 quarters, the holdings of promoters in the institution have been constant. i.e.,
75%. Moreover, none of the outstanding shares from promoter’s are pledged. No doubt,
promoters of company are very confident about future growth prospects of the company.
Foreign Institutional Investors (FIIs) holding has increased by 0.26% to 10.16% compared to
previous quarter. But Share of FII investor holding is witnessing a declining trend when
compared for last 8 quarters. Mutual Funds holding has remained unchanged at 0.52%, which is
a good sign for company. Institutional Investors have increased their holding from 10.42% to
10.68% in H2FY22. The offset of increase in FII/FPI holding of 0.26% is beared by public investors,
which decreased from 14.58% to 14.32%.

D) KEY MANAGEMENT ANALYSIS

1) Strategies and Goals:

 One of the most important goal is to have a hybrid system which will provide
Broadband and OTT Services as a bundle. For this the company is tying up with
various service providers, thus increasing the reach.
 Next major goal is to achieve 8 million subscribers till the 2 nd quarter of the next year
(Current subscribers: 7.35 million)
 Another goal is to cross-sell to about 10 million Cable TV households.
 The firm is already the Number 1 private wireline broadband player in Gujarat. The
next aim is to penetrate more into rural side of Gujarat by up-sell of the existing
customers.
 One of the strategies being used to achieve the above-mentioned goals is through
acquisitions and consolidations.
 Another strategy is of enhancing the digital infrastructure implementation
capabilities, especially in states like Maharashtra, Andhra Pradesh, Telangana and
Tamil Nadu.
 The strategy to reach the goal is to capitalize and monetize GPON infrastructure to
provide high Speed, high Volume Broadband Services.
NOTE: (GPON is the lowest cost network infrastructure available in the market, using
80% less copper and 60% less power than traditional networks.)

2) Management:
 Independent director Parulben Oza's tenure ended after 5.0 years in the role.
NOTE: No personal shareholding found under Parulben’s name.
 Parulben is the only executive to leave the company over the last 12 months.
 The average board tenure stands out to be 5.2 years, thus proving to be and
experienced.
 The average age of board members is 47 years.
 Chairman: Mr. Rajan Gupta (Chairman since June, 2016)
- Compensation of Chairman: ₹ 4,41,13,751
 - Average Compensation of top most executive in similar sized similar market
firms: ₹ 2,19,78,026
- Conclusion on Chairman’s Compensation vs Market: Rajan's total compensation
(Rs. 4,41,13,751) is above average for companies of similar size in the Indian
market (₹ 2,19,78,026).
- Chairman’s Compensation vs Firm’s Earnings: Rajan's compensation has been
consistent with company performance over the past year.
 Managing Director: Mr. Anirudhsinh Noghubha Jadeja (MD since April, 2014)
- Compensation of MD: ₹ 3,03,60,000
- Average Compensation of top most executive in similar sized similar market
firms: ₹ 2,19,78,026

- Conclusion on MD’s Compensation vs Market: Anirudhsinh's total compensation

(₹ 3,03,60,000) is above average for companies of similar size in the Indian
market (₹ 2,19,78,026).
- MD’s Compensation vs Firm’s Earnings: Anirudhsinh's compensation has been
consistent with company performance over the past year.

 Top Board member’s Tenure, Compensation and Ownership:

Sr. Name Position Tenure Compensation Ownership

No.

1. Rajan Gupta Chairman 5.17 ₹ 4,41,13,751 No data

years

2. Anirudhsinh MD & Director 7 years ₹ 3,03,60,000 11.78% - ₹ 3.5b

Jadeja

3. Amitkumar Shah Whole-Time 12.25 ₹ 95,60,000 0.79% - ₹236.4m

Director years

4. Ajay Singh Non-Executive 7 years ₹ 60,00,000 No data

Director

5. Falgun Shah Independent 5.17 ₹ 52,00,000 No data

Director years

6. Kunal Chandra Independent 5.17 ₹ 42,00,000 No data

Director years

7. Bharat Chovatia Independent 5.17 ₹ 49,00,000 0.000080% -

Director years ₹ 23.9k
 8. Divya Momaya Additional 0.17 No data No data
Independent years
Director

3) Buyback:
Only one buyback was found.
Issue Details-
Scripname GTPL HATHWAY LTD
 Security Type  Equity
 Symbol GTPL
 Issue Type  Takeover
 Issue Period 08 Feb 2019 to 22 Feb 2019

(No Bidding on February 19, 2019 as it was a SEBI Holiday on

account of Chhatrapati Shivaji Maharaj Jayanti)

 Tick Price  0.05

 Market Lot  1
 Book Size - No. of Shares 2,88,40,891
 Minimum Offer Quantity  1
 Maximum Offer Quantity 2,88,40,891
 Face Value  10
 Floor Price/Offer Price 82.65
 Name of Jio Futuristic Digital Holdings Private Limited (hereinafter referred

Acquirer(s)/Company to as “Acquirer 1” or “JFDHPL”)

 Buyer Member JM Financial Limited

4) Auditors:

Year Statutory Auditor Secretarial Auditor Cost Auditor

2021 M/s. Khimji Kunverji & Co. LLP M/s. Chirag Shah & M/s. Rajendra Patel
Associates & Associates
2020 M/s. Khimji Kunverji & Co. LLP M/s. Chirag Shah & M/s. Rajendra Patel
Associates & Associates
2019 M/s. Khimji Kunverji & Co. LLP M/s. Samdani Shah & M/s. Rajendra Patel
 Kabra & Associates
2018 M/s. Khimji Kunverji & Co. LLP M/s. Samdani Shah & M/s. Rajendra Patel
Kabra & Associates
2017 M/s. Khimji Kunverji & Co. LLP M/s. Samdani Shah & M/s. Rajendra Patel
Kabra & Associates
 Conclusion on Auditors: No major change noticed in the auditors over the past few
years. Thus, the auditors are in compliance with the firm’s working and policies. No
negative remarks made by auditors as well.
5) Insider Buying:

The following link contains 28 entries of insider trading incidents in GTPL Hathway:
https://trendlyne.com/equity/insider-trading-sast/all/GTPL/54901/gtpl-hathway-ltd/

 This is a snippet from the link given above. It can be seen in the red arrow that Mr.
Anirudhsinh Jadeja (MD and Director) has been involved in Insider Trading. But like
all other entries, even this entry is not of a concern because the Period (Highlighted
in yellow) and reported to exchange (Highlighted in yellow) is not of a large gap,
which basically means that the transaction was reported just after a day or two, to
the exchange.
 Majority of the incidents seen in the link are of the similar manner wherein the time
gap between transaction and reporting to exchange is a day or two.
 Thus, it can be concluded that there has been Insider Buying, but it has NOT affected
the company in any negative way.