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Monday, October 3, 2022

Disney India May Offer a 10% Stake in the Rs 3,200 Billion Tata Play IPO

Disney owns around a 30% stake in Tata Play, the biggest DTH provider in India

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Sadaf Hasan
Sadaf Hasan
Aspiring reporter covering trending topics

INDIA. Delhi: Disney India is anticipated to sell its 10% interest in Tata Play, a direct-to-home (DTH) service provider. It is considering conducting an initial public offering (IPO) to acquire Rs 3,200 crore. The Securities and Exchange Board of India (Sebi) would likely receive the draught red herring prospectus (DRHP) from Tata Play before the end of this month.

Disney owns around a 30% stake in Tata Play, the biggest DTH provider in India, according to Business Standard, which cited unnamed sources. Additionally, Disney only has a stake in a distribution platform in the Indian market, and it acquired that position in 2019 when it acquired 21 Century Fox, Rupert Murdoch’s media company.

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In Tata Play, Disney has a 20 per cent direct and a 9.8 per cent indirect ownership. According to experts, the corporation will likely sell about 10% of its investment in Tata Play to comply with cross-holding regulations in the media. Although DTH is open to 100% foreign direct investment (FDI), broadcasters are only authorised to invest up to 20% of their shares in DTH firms.

Private equity firm Temasek, which has made investments through its Mauritius-based subsidiary Baytree Investments, is one of the other investors in Tata Play. Baytree has a 10% ownership interest in the business. 

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Tata Sons and Tata Capital are the two largest shareholders in the Tata group, which owns 60% of Tata Play. Over the years, the Tata group has decreased its ownership in Tata Play by 20%.

A Tata Play spokeswoman reportedly told the business newspaper that the company has no further comment on the subject.

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The growth of video streaming services, which have made it simple for consumers to enjoy media and entertainment material whenever they want and wherever they are, has put pressure on the private DTH industry. 

According to experts, private DTH providers’ difficulties have grown due to Prasar Bharati’s aggressive promotion of DD FreeDish over the past five years.

Former Prasar Bharati CEO Shashi Shekhar Vempati told the publication: “DD FreeDish, a free-to-air DTH platform, has been very popular with homes in urban and rural areas over the past few years. As a result, families are content to watch DD FreeDish for their basic entertainment requirements.”

The higher part of the DTH industry is experiencing a churn in terms of subscribers due to individual members using video streaming apps for more individualised entertainment demands.

According to a recent Prasar Bharati study, DD FreeDish’s subscriber base increased from 2.2 million to 4.3 million between 2017 and 2022. The numbers are still rising as more channels seek to partner with it.

Also Read: Adani  Acquires  29%  Stake in NDTV

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