Tata Sky, the satellite TV business arm of the Tata Group, is gearing up for listing in FY22 and will soon file draft share sale documents with the Securities and Exchange Board of India (SEBI) for its initial public offer (IPO).
Work on the draft IPO prospectus is in the final stages and is likely to be filed with the markets regulator by next month. Thus, the IPO is expected to be launched before the end of this fiscal, a source told the Mint.
The source further stated that Kotak Mahindra Capital is advising Tata Group on the IPO, adding that some foreign investment banks are also involved. Tata Sky's IPO will give an exit route to investors, particularly Disney which has been looking to off load its stake.
"Disney does not have investments in any other distribution platform apart from Tata Sky. This is non-core for them, and they want to focus on their main consumer-focused business of Disney+, given the fierce competition in the OTT market. Other options were explored in the past to either bring in a strategic investor or Tatas buying Disney's stake; but right now, it looks like the IPO is the way forward for the company," another source told the publication.
The source added that other existing investors, such as Tata Capital and Temasek, who have been invested in the company for a long time, would also like to dilute some of their stakes, and Disney too, will sell part of its stake in the IPO.
Sized around Rs 2,000-3,000 crore, the proposed IPO will be a mix of primary capital raising for use in the business and secondary share sales by existing investors, the sources further stated.
Tata Sky commenced operations in 2004 as a joint venture between Tata Sons and Network Digital Distribution Services FZ-LLC, owned by Rupert Murdoch's 21st Century Fox.
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