Tata Play IPO: Disney to sell entire stake, says report

The Walt Disney Company is planning to sell its entire stake in Tata Play Ltd., previously known as Tata Sky, as per a Mint report. It is going to offload a 29.8 per cent stake during the proposed Initial Public Offering (IPO) by Tata Play. This move by the American entertainment giant comes at a time when it is focusing on its streaming and broadcast service businesses in India. As per the report by Mint, the ownership of Tata Play has been causing conflict for Disney, India’s regulatory bodies and the Ministry of Information and Broadcasting.

Foreign direct investment (FDI) of 100 per cent is allowed in the satellite TV sector by India. However, the maximum stake a broadcaster can own in a direct-to-home (DTH) TV operator in the country has been set at 20 per cent.

Disney received its stake in Tata after it acquired 21st Century Fox from Rupert Murdoch. It began internal discussions to exit the Indian corporation in 2019, but the plans for Tata Play’s public issue kept getting deferred. However, on 29 November, Tata Play filed a confidential offer document for its IPO with the Securities and Exchange Board of India (SEBI).

The DTH platform became the first company to take the pre-filing route for its initial share sale. The offer document of Tata Play is only going to be open to scrutiny by the regulator and the exchanges, but won’t be available to the public. Once SEBI issues its observations and the company decides to roll out its IPO, it will have to file an updated Draft Red Herring Prospectus (DRHP) which can be viewed by investors.

Tata Play is looking at a Rs 2,500 crore IPO and has hired banks like Kotak Mahindra Capital, Morgan Stanley, IIFL, Citi and Bank of America for advice on the IPO and subsequent listing.

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