Charged up

Calcutta, July 11: Exide Industries, the country’s largest lead acid storage battery maker, has picked up a stake in cable distribution and broadband venture Hathway Cable and Datacom Ltd.

Calcutta-based Exide bought around 11 lakh shares of Hathway, which had launched an initial public offering in February.

This is Exide’s second investment in an apparently unrelated business after it became a partner in ING Vysya Life Insurance Company Ltd. The battery maker has a 50 per cent voting right in the unlisted and loss-making life insurance venture.

Exide bought the shares at Rs 240 apiece, the same price at which the Hathway IPO was floated, with total investment of Rs 26.22 crore.

On the basis of the closing price on the NSE on Friday, the shares have a market value of Rs 19.88 crore, or a discount of around 24 per cent.

Exide is majority owned by Rajan Raheja Group. Hathway Cable and Datacom is part of the group. Rajan Raheja is the vice-chairman and non-executive director of Exide. He is also a director at Hathway along with Akshay Rajan Raheja and Viren Rajan Raheja. Akshay and Viren hold 17 per cent and 16.74 per cent stakes, respectively, in Hathway.

The IPO of the cable company had managed to scrape though on the last day propelled by oversubscription by qualified institutional buyers and non-institutional buyers.

Hathway offered around 2.77 crore shares in the IPO, including anchor investors who bought around 50 lakh shares.

If Exide had subscribed to the IPO — no company official was available for comment today — it would have bought almost 3.93 per cent of the shares. The IPO eventually raised about Rs 660 crore.

The Hathway stock had opened at Rs 246 on the day of listing on February 25 but could never go close to the issue price of Rs 240 — the price at which Exide had bought the shares.

At present, the battery maker owns around 0.76 per cent of Hathway equity.

The cable company reported revenues of Rs 400 crore and loss of Rs 81.54 crore in the last fiscal.

Australia selloff

In the last fiscal, Exide exited loss-making Australian associate company Ceil Motive Power Pty Ltd.

The investment was made in the erstwhile Chloride company in July 2007 to expand the company’s market in Australia.

Ceil suffered heavy losses because of the economic slowdown and cheap imports from China and Taiwan.

Exide then decided to sell its 26 per cent share to the other joint venture partner.