Den Network, Hathway Cable shares gain over 10%; Is Reliance Industries really buying stake?
While share price of cable service providers like Den Network and Hathway Cable saw surge in thier share price after reports mentioned Reliance Industries will be buying stake. However, RIL's shares saw selling pressure by investors.
- RIL in talks to buy stake in Den Networks
- Shares of Den Networks and Hathway Cable surge on stock exchanges
- Reliance Industries shares down over 2% after the news
Share price of Den Network surged by nearly 13% on Wednesday after media reports stated that Mukesh Ambani's Reliance Industries may buy stake in the company.
At 1343 hours, the stock of Den Networks was trading at Rs 93.85 per piece higher by Rs 5.90 or 6.71% on BSE. In early trade, the stock price touched over Rs 99-mark - a level which was last seen in the month of May 2017.
As per Economic Times report, RIL is said to be in talks to acquire Sameer Manchanda's Den Networks. The deal is most likely to go through and the valuation is looking between Rs 2,000 crore and Rs 2,200 crore.
The stock exchanges have sought clarification from both RIL and Den Network with reference to the news, however their reply is awaited.
Den Network has held its tenth annual general meeting of members on Wednesday (September 27, 2017), at around 11.30 am in New Delhi.
The company has been significantly trying to narrow down its losses and net debt.
In first quarter of fiscal year 2017-18 (Q1FY18), Den Network's net loss narrowed to Rs 15 crore compared to Rs 52 crore in Q1FY17 and Rs 66 crore in Q4FY17.
Losses in cable business has also improved when it stood at Rs 7 crore in Q1FY18 versus loss of Rs 37 crore in Q1FY17 and Rs 47 crore in Q4FY17.
Cable subscription revenue growth of 34% on year-on-year (YoY) basis to Rs 181 crore in Q1FY18. While broadband subscription has rose by 19% yoy to Rs 21 crore in the same period.
Net debt of Den Network has also come down to Rs 123 crore in Q1FY18 compared to Rs 169 crore in FY17 and Rs 319 crore in FY16.
Recently on September 06, Den Network received approval from the National Company Law Tribunal (NCLT) for demerger of its broadband business into a fully-owned subsidiary unit called Skynet Cable Network.
RIL's an unit Reliance Jio Media (operates under the flagship of Reliance Jio Infocomm) received license to operate as a pan-India multi-system operator (MSO). During the same year, RIL hired K Jayaraman, a cable industry expert who led India's largest MSO Hathway Cable & Datacom, and SN Sharma, then CEO of DEN Networks.
After the news even Hathway Cable & Datacom's share price jumped by nearly 10% on BSE. At 1343 hours, the shares were trading at Rs 30.95 per piece above Rs 1 or 3.69%.
While both the cable service provider saw good response on the news, share price of Reliance Industries however faced selling pressure by investors.
At 1343 hours, the stock price of RIL was trading at Rs 801.75 per piece down Rs 18 or 2.13%.