Videocon's DTH arm plans to raise Rs 7 bn via IPO

MUMBAI: Videocon has taken the leap to list its direct-to-home (DTH) arm, Bharat Business Channel Ltd, to cash in on the digitisation wave.

Bharat Business Channel Ltd, which operates its DTH business under the Videocon d2H brand, is planning to raise Rs 7 billion through an initial public offering (IPO). The company has filed its documents with market regulator Securities and Exchange Board (Sebi).

The company is also looking at raising Rs 500 million through a pre-IPO placement of its shares to institutional investors.

The promoters (the Dhoot family) had earlier issued rights issue at Rs 50 a share. A similar IPO pricing would lead to a 36 per cent dilution, pegging the value of the company at Rs 19 billion. But the promoters, it is understood, are looking at a higher valuation as they tap the capital.

Starting operations in July 2009, Bharat Business Channel has a gross subscriber base of 6.62 million as of 30 September 2012.

The company has a negative net worth of Rs 5.90 billion as of 30 September 2012, reporting net loss of Rs 11.40 billion in the last three fiscals. In the first half of this fiscal, it had a net loss of Rs 2.70 billion on revenue of Rs 4.93 billion.

The government has mandated digitisation across the country by 31 December 2014, leading to a huge funding requirement among cable TV operators and DTH companies.

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