MUMBAI: Cyrus Mistry has initiated a process to sell part of Tata Sky in his first initial public offering (IPO) move after becoming Tata Group chairman in 2012. The $300-million (about Rs 2,000-crore) Tata Sky issue — among the biggest IPO fund-mobilization programmes in recent times — will be an offering from India’s largest business house after more than a decade since its marquee Tata Consultancy Services was listed in 2004.Tata Sky will also be the 30th publicly listed company from the Tata Group, which currently has a combined market cap of nearly Rs 7.2 lakh crore.
Morgan Stanley, Citi and Kotak Mahindra Capital will manage the offering of India’s premier direct-to-home television service provider in which Tata Sons — the holding company of the Tata Group — owns 51%, media mogul Rupert Murdoch’s 21st Century Fox has 30%, Singapore state investor Temasek 10% and Tata Opportunities Fund holds 9%.
Early next week, the company’s investors, management, underwriters and counsels will hold the kickoff meeting to thrash out the red herring prospectus, said a person familiar with the development.
Mistry has revived the plan to list Tata Sky on the domestic stock market, which will help the 47-yearold to part-monetize the asset by bringing in fresh funds to fuel the conglomerate’s conglomerate’s growth plans and trim its debt.
There will be a sale of new shares as well as of existing shares held by promoters including Tata Sons and Temasek, which has remained invested in Tata Sky since 2007. Temasek, said another person, wants to encash some of its holdings in the 12-year-old Tata Sky, which will have a gross profit of Rs 1,000 crore in fiscal 2016. Murdoch’s 21st Century Fox intends to retain its ownership, while Tata Opportunities Fund is undecided whether it wants to sell a stake in the IPO, the person added.
Tata Sky — which competes with state-run DD Direct, Zee’s Dish TV and Airtel & Videocon’s DTH services — plans to use the proceeds from the share sale to shore up its balance sheet. The company, which has emerged as the leader in DTH, will break even this financial year. In fiscal 2015, its loss stood at Rs 267 crore.
The increase in television content consumption and intensification of digitization will boost DTH’s share of Indian pay-TV subscribers to over 40% by the end of this decade, according to industry analysts.
Reeba Zachariah is assistant corporate editor at The Times of Ind...
Read MoreReeba Zachariah is assistant corporate editor at The Times of India, Mumbai. She has been covering large Indian business houses such as the Tata Group. She also reports on a host of sectors like hospitality, retail, travel, liquor and consumer durables. She has been writing on mergers and acquisitions and private equity.
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