Dish TV India Ltd approved the proposal to raise Rs 250 crore through preferential allotment of shares and convertible warrants to Indivision India Partners.
Indivision to invest through a mix of equities and warrants
MUMBAI: Dish TV India, the country’s leading direct-to-home digital television service operator from the Essel group, got on board Indivision India Partners, to invest Rs 250 crore as a strategic investor.
Mauritius-registered Indivision will invest Rs 250 crore through a cocktail of equities and convertible warrants.
The board met on Wednesday to consider and approve the fundraising programme.
The preferential equity issue will be at a premium of 6% to the current market price of Dish TV, whereas the convertible warrants will be priced at 38% premium.
Commenting on the induction of Indivision, Subhash Chandra, chairman, said: “We are confident Dish TV would deliver long-term value to all its stake holders.”
The proposal will go before shareholders, and an extra-ordinary general meeting is slated on January 4.
Dish TV leads the DTH segment in the country with 2.4 million subscribers. Tata Sky is the only competitor in the DTH space.
A recent report by Enam Securities commented on the advantage that Dish enjoys by virtue of being the first mover: “Dish will have attained considerable economies of scale before competition sets in,” the Enam report said.
Enam was apparently referring to the impending, competition from Sun Direct, Reliance Communications- Blue Magic and Bharti Airtel in the coming months which will only intensify competition.
Sun Direct is expected to launch later this month, while Reliance is slated for launch by April 2008. Bharti is expected to launch DTH operations by the fag end of 2008. By then Dish TV hopes to dig in its heels and wait for the competition.
Enam believes that the main challenge before the players would be to increase the average revenue per user.
Dish will issue Indivision 1.25 crore equity shares of Re 1 each in the company at a price of Rs 100 each, aggregating Rs 125 crore. Indivision would also subscribe to 96.15 lakh Warrants, convertible into 96.15 lakh equity shares at a price of Rs 130 per equity share aggregating to Rs 125 crore, within a period of 18 months from the date of issue of the warrants.
The placement is done at a premium to current prices, as Dish TV shares ended on Wednesday’s trading at Rs 94.25 from previous day’s close of Rs 97.20, a loss of 3%.
Dish TV has targeted 7.9 million by 2011, which means adding 20,000 subscribers per week.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}