Indian industrial conglomerate Videocon Industries has reportedly hired UBS to sell a 25% stake in its local DTH firm, called D2H, for US$75m-US$100m.
Videocon is talking to PE firms including ICICI Venture, which is part of India’s ICICI Bank, about…
Indian industrial conglomerate Videocon Industries has reportedly hired UBS to sell a 25% stake in its local DTH firm, called D2H, for US$75m-US$100m.
Videocon is talking to PE firms including ICICI Venture, which is part of India’s ICICI Bank, about the stake, reported Reuters citing sources.
The speculation comes as Videocon announces that A. L. Bongirwar, a director of the company, has resigned for personal reasons. According to a brief stock exchange announcement on 7 November, Bongirwar resigned with effect from 1 November.
Videocon, which will post Q3 results on 12 November, was unable to comment on the stake speculation, or the reasons for the departure of one of its directors.
D2H was launched in May 2009 to join India’s crowded DTH market, which comprises Dish TV, Tata Sky, Sun Direct, Airtel Digital TV, and Reliance Digital TV. State broadcaster Doordarshan also has a free-to-air DTH platform called DD Direct+.
The Indian satellite broadcasting sector has surged in popularity over the past couple of years as the country’s upwardly mobile population gain increasing spending power. The Indian market as a whole is also seeing increasing activity from private equity firms as banks scale down their lending amid a lull in public markets.
Several sponsors were reportedly encircling Indian IT services company Tech Mahindra earlier this year for a 23.2% stake, with local reports in October suggesting US-based Advent International and Carlyle Group are frontrunners.
In addition, a recent government amendment to the country’s FDI rules, which increased the maximum share that a foreign investor can own in an Indian DTH company from 49% to 74%, has ushered in more opportunities for equity investments.
At the end of August, local daily The Financial Express, citing sources, suggested that India-based conglomerate Reliance was looking to sell 49% of its DTH platform to one or more investors for Rs20bn-RS 25bn (US$405m-US$507m).
US cable company Comcast had approached Reliance about the stake and the Indian firm could consider selling an even larger chunk to a strategic investor for the right price, added the report.
Local reports explain that currently Reliance Digital TV is India’s only DTH operator that has not sold any stake to foreign investors.
Both companies were unable to comment on the speculation.
