Hathway Cable and Datacom Ltd on Thursday announced plans to demerge the company’s broadband business into a new subsidiary aimed at unlocking value for the shareholder.

The new entity, Hathway Broadband Pvt. Ltd, will focus on the growth potential for high speed data and related services in India.

Hathway Cable is promoted by the Raheja Group. Jagdish Kumar, Managing Director and Chief Executive Officer at Hathway Cable, said the restructuring recognises that the market dynamics of the broadband business are unique as compared to its parent cable television business. Globally, wireline or fixed broadband has emerged as a key driver of technology adoption. India lags most countries, including those in Asia, in fixed-line broadband penetration.

“Hathway Broadband intends to take the lead in driving wireline broadband penetration in India and become a key player in Prime Minister Narendra Modi’s Digital India initiative,” the company said in a statement to the BSE.

“The definitive terms and conditions of the proposed demerger are being evaluated. The draft scheme of demerger shall be placed before the board for approval,” the company added.

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