DTH companies queue up to raise funds for expansion

Last Updated: Mon, Dec 10, 2012 03:51 hrs

pEnthused by the surge in demand for digitisation some of the leading domestic direct-to-home DTH service companies such as the Tatas Videocon and Dish TV are looking to raise funds &mdash from initial public offering IPO listing abroad or from private equity playersppThe Tatas are looking to raise Rs 2000 crore through stake sale in Tata Sky Ltd while Videocon D2H is going to raise around Rs 1000 crore Subhash Chandra&rsquos Dish TV aims to garner about Rs 550 crore by listing abroad The funds will be used to expand operations growing rapidly after the government&rsquos recent move to make installing set-top boxes to receive satellite television channels mandatorypp&ldquoWe are looking at Rs 1000-crore equity dilution to investors Taking peer valuation as benchmark our DTH company&rsquos valuation should be over Rs 5500 crore 1 billion&rdquo says Videocon D2H Chairman Venugopal Dhoot The company has a little more than 75 million customers and is even selling televisions with in-built DTH machines &ldquoEach month we are number one in terms of customer addition and the time now is ripe to give other investors an opportunity to participate in our growth&rdquo Dhoot saidpptable cellpadding2 width400 tbody tr styleheight 15pt height20 td width676 bgcolor95acb3 height1font faceTahoma colorffffff size2strongDIGITAL DRIVEstrongbr DTH players&rsquo fund-raising plansfonttd tr tr styleheight 15pt height20 td width676 bgcolorccd7dd height136 ul lifont faceTahoma size2strongRs 2000 crorestrongbr The Tatas are looking to sell fontfont faceTahoma size2strong10-15strong in strongTata Skystrong to PE firmsfontli lifont faceTahoma size2strongRs 1000 crorestrongbr strongVideocon D2Hstrong will go for an IPO expects strongRs 5500-crorestrong valuationfontli lifont faceTahoma size2strongRs 550 crorestrongbr strongDish TVstrong which is listed on Indian bourses will sell its shares to foreign investors by issuing global depository receiptsfontli ul td tr tbodytableppThe DTH industry had been growing at an explosive rate with 100 per cent increase in customer base and a steady income from customers he said Videocon D2H might file with Sebi the papers for an IPO in a couple of weeks said a banker familiar with the matterppAnother banking source said Tata Sky needed Rs 500 crore each year as equity infusion for its operations and to service loans The proceeds from a 10-15 per cent stake sale to a clutch of private equity PE firms would be used by the company for these The loss-making company which started operations in August 2006 is also evaluating the option of raising funds through a Rs 2000-crore IPO if it does not get a good valuation from PE firmsppDish TV listed on the Indian bourses and with market capitalisation of Rs 8597 crore will sell its shares to foreign investors by issuing global depository receipts GDRs worth 100 million Rs 550 crore Promoters currently hold 64 per cent stake in the company which has a 33 per cent market share in the six-operator industry The others are Reliance BIG TV Airtel Digital Sun Direct DD Direct and Videocon D2HppDish TV has taken shareholders&rsquo approval for its fund-raising plan and appointed Goldman Sachs to manage the GDR issue banking sources say When contacted a Dish TV spokesperson declined to comment on the issueppCompanies needed money to finance their second phase of expansion in Tier-II towns said Sandip Sabharwal CEO PMS Prabhudas Lilladher &ldquoThe costs are not for subscription additions but for set-top boxes With the financial health of listed players improving it makes sense for DTH operators to raise funds at these valuations&rdquo Sabharwal saidp

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