The shares of Hathway are soaring. Know why

Hathway Cable & Datacom Ltd. jumped sharply in Thursday's late morning deals after the central bank allowed foreign investors to buy more of the company's equity capital following a change in regulations.

The Reserve Bank of India gave its assent to foreign investors buying up to 74 percent stake in Hathway up from 49 percent earlier after the company's board had passed the required regulations. Earlier in July, the government had changed the way it recognized foreign capital into domestic shares.

As a consequence, Hathway jumped 3.70 rupees, or 9.2 percent, to 43.75 rupees on the National Stock Exchange where 7.2 lakh shares were traded compared with a 5-day average of 75,000 shares.

Hathway trades at 3.3 times its book value of 13.7 rupees. The company's market capitalisation has slid 21 percent to 3,712 crore rupees.

Image credit: Indiatimes