Tata Play likely to file IPO prospectus this month

 

Tata Play likely to file IPO prospectus this month

• Tata Sky commenced operations in 2004 as an 80:20 joint venture between Tata Sons and Network Digital Distribution Services FZ-LLC (NDDS)

Mumbai: Tata Sky, the satellite television business of the Tata group, which was rebranded as Tata Play Ltd at the start of the year, is likely to file the draft prospectus for its initial public offering by the end of this month, which is likely to range between $300-400 million at least, said two people aware of the development, speaking on the condition of anonymity.

Tata Sky commenced operations in 2004 as an 80:20 joint venture between Tata Sons and Network Digital Distribution Services FZ-LLC (NDDS), an entity owned by Rupert Murdoch’s 21 Century Fox. Disney acquired Fox in 2019. Disney owns another 9.8% stake in Tata Sky through TS Investments Ltd, where Fox owned 49% stake with Tata owning the rest. In FY08, Baytree Investments (Mauritius) Pte Ltd (Bay Tree), an affiliate of Temasek acquired a 10% stake in Tata Sky, while in FY13, Tata Opportunities Fund and Tata Capital Ltd acquired an equity stake in the company. Tata Sons has a 41.49% stake in the company.

Mint first reported in August 2021 that the company was planning to go public.

“Work on the IPO had started last year but was put on the back burner for a while as the company undertook a rebranding exercise and the markets too started to look difficult in the early part of the calendar year. However, work on the draft red herring prospectus (DRHP) was restarted recently and efforts are in full swing to file the DRHP by end of this month," said the first person cited above.

In January, the Tata group rebranded Tata Sky as Tata Play to reflect its business interests growing beyond Direct To Home services and aid further diversification into allied businesses such as OTT and broadband.

In a press statement announcing the rebranding, Harit Nagpal, managing director and chief executive of Tata Play Ltd said, “Tata Sky leveraged its market leadership in its core business to create an ecosystem of content delivery by foraying into OTT and Broadband. We believe it is time for a brand identity that resonates beyond our DTH business."

The proposed IPO will see investors Temasek and Tata Capital sell part of their stakes in the company, while the company also plans to raise money for its use.

“Temasek and Tata Capital have been invested in the company for a long time. So they are looking to dilute their holdings. The final quantum of the secondary stake sales is still under discussion. The company will also raise primary capital to invest in growing its businesses in areas beyond DTH, especially broadband," said the second person cited above.

The IPO size is expected to be in the range of $300-400 million, he added.

Tata Play reported a slight increase in its revenue from operations in FY22 to Rs4,741 crore, from a revenue of Rs4,682 crore in FY21. Profits however remained flat at Rs68.6 crore in FY22 compared to profit of Rs68.75 in the previous fiscal.

Tata Play is the biggest DTH service provider in the company with a 33.23% market share. Overall DTH subscribers in the country stood at 66.9 million at the end of 31 March, as per data from Telecom Regulatory Authority of India.

Emails sent to Tata Play on Friday did not elicit a response.