(5 December 2007 10:30 pm)

MUMBAI: Deals are beginning to happen on the direct-to-home (DTH) front. Subhash Chandra-promoted Dish TV India Ltd. has diluted 4.9 per cent stake to Indivision Capital, the private equity arm of Kishore Biyani's Future Capital, for Rs 2.5 billion.

Dish TV is raising Rs 1.25 billion in the first tranche via issue of equity shares at Rs 100 per share, valuing the DTH company in the current transaction at Rs 42 billion.

The second tranche will raise the same amount but through conversion of warrants at Rs 130 per share. "We will use the money for acquiring customers, buying set-top boxes and building the brand," said Dish TV CEO Arun Kapoor.

Dish TV board has approved to issue and allot 12.5 million equity shares of Re 1 each to Indivision at a price of Rs 100. Indivision will also subscribe to 9.6 million warrants - each convertible into an equity share - at Rs 130 per share within 18 months from the date of issue of the warrants. The preferential allotment is subject to regulatory approvals.

Dish TV's fund-raising activties will continue as the company is in a significant customer acquisition spree, says Kapoor. The plan is to invest Rs 11 billion over two years. "We are looking at a 60 per cent equity and 40 per cent debt ratio," adds Kapoor.

Said Dish TV chairman Chandra, “We are happy to announce the participation of IndivisionIndia Partners in our effort to provide consumers with unparalleled quality of digital television services directly to their homes. We are confident that Dish TV would deliver long term value to all its stake-holders."