MUMBAI: Hinduja-owned IndusInd Media and Communications (IMCL) is in talks with private equity investors to raise $75 million to fund the second phase of cable TV digitisation.
IMCL has mandated Ernst & Young to find an investor for its funding requirement. "With India mandating digitisation, there is a huge appetite to invest in cable TV companies. We are looking at raising $75 million. E&Y has been given the mandate for this purpose," IndusInd Media & Communications chief executive officer Nagesh Chhabria tells Indiantelevision.com.
IMCL, which operates its cable TV business under the Incablenet brand, will need Rs 6 billion as it is targeting four million set-top boxes (STBs). "We have existing lines of credit from banks for $15 million. We can raise $10 million of new debt," says Chhabria.
IMCL has a debt of Rs 3 billion
The multi-system operator (MSO) operates in 15 out of the 38 cities that fall under digitisation in the second phase. The plan is to also enter into 14 more markets. "We would require two million STBs from our existing cities. We anticipate another two million boxes from the new operations," says Chhabria.
Will IMCL look at acquiring cable networks for entering these markets? "There are many operators who will find it difficult to fund digitisation. We are in talks with independent operators. We can also enter on our own," says Chhabria.
IMCL has deployed 1.3 million boxes across three cities in the first phase. "Our target is 1.5 million STBs," Chhabria says.
The government has mandated digitisation in 38 more cities by 31 March 2013, after switching to digital delivery of cable TV in Mumbai, Delhi and Kolkata from 1 November. The revised deadline for switchover to digital delivery in Chennai is likely to be decided by the Madras High Court.