MUMBAI: Tata Group and The Walt Disney India – the joint venture partners of Tata Play (formerly Tata Sky) – have finally agreed to launch an initial public offering (IPO ) to start, three people with direct knowledge of the matter said.
The leading direct-to-home (DTH) platform has already appointed
as senior banker and Cyril Amarchand Mangaldas (CAM), one of India’s largest commercial law firms, to advise on the IPO and subsequent listing, one of the people said.
“A Draft Red Herring Prospectus (DRHP) is being finalized and is expected to be submitted to market regulator Sebi (the Securities and Exchange Board of India) by the end of this month,” the person said on condition of anonymity.
This isn’t the first time promoters of Tata Play have toyed with the idea of an IPO.
In December 2020, ET reported that Disney, which owns around 30% of the DTH company — 20% directly and 9.8% indirectly — intended to inherit the stake it inherited as part of the global buyout of Rupert Murdoch’s 21st Century Fox business had to repel .
There were at least three other cases — in 2013, 2016 and 2019 — where promoters double-checked IPO plans before shelving them, the second person said.
“Last time there was more seriousness but then the pandemic hit the world. Now one of the investors, Temasek, wants an exit and an IPO is being evaluated as a way forward,” the person said.
The third executive, a banker, said that Temasek and Tata Group are pushing the IPO plan.
“The feelers have already been sent to the market to assess the reaction. Temasek, which has been invested since 2008, is looking to exit and if not now it may be too late to go public,” he added.
“As a matter of principle, Temasek does not comment on market speculation and rumors,” a Temasek spokesperson responded to ET’s inquiries.
One key change is that Disney, which had previously considered an exit, has now decided to stay invested but may try to reduce its stake, people said.
“Disney no longer wants to leave Tata Play,” said a senior source. “They have yet to decide to divest part of their 30 percent stake, but have given the go-ahead to go public.”
Tata Sons owns 51% of Tata Play. Tata Play had not responded to ET’s inquiries as of Friday’s press deadline.
Tata Play is seen as strategically important and adding value to the group’s digital growth plans, according to group insiders.
“Discussions are ongoing to onboard a strategic investor and offer an exit route to some investors,” a Tata Group insider said.
Owned by Murdoch, Fox entered into a joint venture with Tata Group in 2004 to form DTH with a 20% stake. Later in 2008, Temasek Holdings of Singapore acquired a 10% stake in the company.
Tata Play, which had 18.3 million active pay subscribers as of 31 March, reported FY22 operating revenue of Rs.4,741 crore and net profit of Rs.68.6 crore.
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