Shares of cable operators surged on Monday on reports that Reliance Industries was considering to buy a minimum of 26 per cent stake in several cable operators in a bid to boost its 4G broadband services reach in consumer homes.

”The move is part of the group’s strategy to rope in cable operators as well as multi-system operators (MSOs) as partners to provide last-mile connectivity to consumer homes for 4G broadband services, which would include data, voice and television,” Elara Capital said in a note.

Hathway Cable and Datacom soared 12.11 per cent to Rs 132.80 and was the top performer among the BSE 500 pack. Den Networks climbed 6.25 per cent to Rs 63.75. Volumes also surged.

Other cable operators named in the report were Digicable Networks and IndusInd Media and Communications, which are not listed on the bourses. Wire and Wireless India was up 3.68 per cent. Hathway Cable, however, during the trading session denied the report on the BSE.

”Nobody from Reliance Industries (RIL) has ever approached the company or anybody associated with our company and that the two newspaper reporters never called anybody in our organisation,” the company told

BSE in a note. Den Networks, on the other hand neither denied nor agreed to the report.

”It is the company's policy not to comment on speculative media reports and any information on strategic investments in the company will be brought to the notice of the stock exchange as is required under the provisions of Listing Agreement," the company clarified.

RIL had bought 95 per cent stake in an unlisted company Infotel Broadband Services in June 2010, around the time the company won pan-India wireless and broadband spectrum license. Infotel Broadband

Serivces and paid Rs 12,847 crore as spectrum fees.

Experts pointed that the government is setting a deadline for digitisation by 2012 in metros and by 2014 across the country, for which cable operators and MSOs would require a massive investment of Rs 250 billion.

“With compulsory digitisation, economic retention will be the crucial driver in value creation. Curbing of revenue leakages will be the main growth factor for cable and satellite industry to register 10 per cent CAGR over 2012E-15E.,” said PINC Research in a recent note.

Meanwhile, Reliance Industries closed at Rs 713.40, down 2.55 per cent. The scrip was down as the market regulator is checking whether the company made proper disclosure about the acquisition of significant stakes in ETV channels.

Excluding Monday’s gains, Den Networks, Wire and Wireless and Hathway Cable were down 30.72, per cent, 20.50 per cent and 5.09 per cent, respectively, in the past three months.

However, the first two weeks of 2012 were positive for the scrips as Wire and Wireless India, Den Networks and Hathway Cable climbed 23.65 per cent, 21.70 per cent and 6.18 per cent, respectively, during the period.