Indian industrial conglomerate Videocon Industries reportedly plans to launch the IPO of its DTH pay-TV platform Videocon D2H by early April, according to chairman Venugopal Dhoot in an interview with Indian business channel CNBC TV18. As…
Indian industrial conglomerate Videocon Industries reportedly plans to launch the IPO of its DTH pay-TV platform Videocon D2H by early April, according to chairman Venugopal Dhoot in an interview with Indian business channel CNBC TV18.
As SatelliteFinance reported back in November, an IPO has been on the cards for a while after the company failed to sell a stake to private equity in 2011.
A draft prospectus for the IPO was filed with the Securities and Exchange Board of India (SEBI) on 17 December 2012 which said that the company expects to raise up to Rs7,000m (US$128.8m) from the sale of at least a quarter of its equity of Bharat Business Channel, the holding company name of the DTH business. The face value of the shares is Rs10 (US$0.2) each.
Videocon is also considering a pre-IPO placement of up to 10 million shares in order to raise up to Rs500m (US$9.2m) from anchor investors, the company said. If a pre-IPO placement is completed, the issue size will be reduced accordingly.
The price band and minimum bid lot are yet to be decided by Videocon and its mandated banks.
Enam Securities and UBS are joint global coordinators and bookrunning lead managers on the deal, while IDBI Capital, SBI Capital Markets and YES Bank have been mandated as bookrunning lead managers.
Within the draft prospectus, Videocon listed a number of factors which could make the imminent IPO high risk for investors. These included the indebtedness of the company and intense competition in the Indian DTH market.
“We compete directly with other pay DTH operators, as well as indirectly with cable operators, IPTV operators and free-to-air television,” said Videocon in the prospectus. “Competition in the Indian pay DTH market is intense, and we cannot guarantee that we will be successful in generating sufficient subscriber revenue in light of the competition we face.”
The company lists its key DTH competitors as Tata Sky, Dish TV India and telco Bharti Airtel’s subsidiary Bharti Telemedia.
Despite fierce competition in the DTH market and calls for consolidation, it appears the market remains attractive for investors. As SatelliteFinance previously reported, Bharti Airtel is said to be looking to sell a quarter of Bharti Telemedia and expects a valuation of US$1bn, which analysts affirm is a realistic estimate. Both private equity funds and cablecos are believed to be interested in the stake.
Videocon and the mandated banks did not respond to requests for comment.
