Bharti Airtel is looking to divest 20-25 percent stake in its satellite TV services arm, Direct-to-Home (DTH), and is in talks with several potential suitors for the same.
The company's move comes after the Government last year increased the foreign direct investment limit in DTH and digital cable companies to 74 percent.
Bharti Airtel is looking at a valuation of little over $1 billion for the unit that had 7.9 million digital television customers as of December. According to a report in the Times of India, Airtel will raise around $250-300 million ( up to Rs 1,650 crore) from the stake sale.
American DTH players like Comcast and Liberty Global are in talks with Bharti Airtel for buying stake.PE players like KKR, Providence, Bain Capital, GAAP are also in the fray.
The sale also comes at a time when rivals Videocon and Tata Sky are looking to tap the market to raise funds through initial public offers. Videocon d2H is planning to raise an estimated Rs 700 crore through an initial public offering.
At the end of December, Airtel digital TV had 7.9 million customers on its DTH platform, up 12% from 7 million a year earlier.
The digital TV business of the company posted sales of Rs.428 crore for the quarter ended December, accounting for just 3% of the company's total revenue.
Recently, Bharti Airtel raised $1 billion issuing 5.125% senior notes through its subsidiary Bharti Airtel International.
Direct-to-home television broadcast services in India have been gaining momentum due to growing spending power in India and also helped by a government move to digitise the cable network. The first phase of digitization of television signals has been implemented in Kolkata, New Delhi and Mumbai. The deadline for the second phase of digitization is 31 March.
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Updated Date: Dec 20, 2014 17:38:58 IST