IndianMascot
Core Member
Private Equity firms which are reluctant for investments due to regulatory hurdles, have seen a huge opportunity in the ongoing digitisation drive of Indian government.
According to experts, Direct-To-Home (DTH) players and cable operators, in dire need of additional investments, are likely to tap the PE investors in India as a main source.
According to a recent Ficci KPMG report, the number of Cable and satellite (C&S) households in India increased by 11 million in 2012, to reach 130 million and the paid C&S base is expected to grow to 173 million by 2017, representing 91 percent of TV households.
This week, DEN Networks Ltd, a leading Indian cable distribution company, has raised a total of $180 million (Rs 1,000 crore) through mix of preferential allotment and qualified institutional placement (QIP). Through preferential placement, the company raised $110 million (Rs 600 crore) from PE arm of Goldman Sachs.
Bharti Airtel's direct-to-home business (DTH) Airtel Digital TV is engaged in talks with PE majors - KKR, Carlyle and Bain Capital to sell off about 20% stake in its DTH business to raise about $200 million. PE funds are keen to invest in DTH space after India decided to increase the foreign direct investment limit in DTH and digital cable companies from 49% to 74%.
Last year, PE firm Providence Equity had bought 9.9% in Hathway Cable for Rs 205 crore, while Macquarie had picked 7.4% stake for Rs 153 crore. US private equity firm Apollo Global Management LLC had bought 11% stake in India's largest direct-to-home service operator Dish TV for about $100 million in 2009.
Other DTH players who are in fundraising mode include Videocon which has filed DRHP to raise about Rs 700 crore for its DTH arm Bharat Business Channel, and Tata Sky which plans a Rs 2500-crore IPO.
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