This Tata Group Company is Gearing Up for Public Listing in FY22

The satellite TV arm of Tata Group is preparing to draft share sale documents with market regulator SEBI. Sources close to the matter say that Tata Sky will go for its public listing within March 2022.

Tata Sky’s IPO size might range somewhere between Rs. 2,000 and Rs. 3,000 crore. This IPO would comprise both primary capital raising and an offer for sale by the current investors and shareholders.

Know More About the Company

Tata Sky is a leading direct broadcast satellite television service provider in India. It was established in 2004 as a joint venture among Network Digital Distribution Services FZ-LLC and Tata Sons. FZ-LLC is owned by 21st Century Fox, which Disney had later acquired in 2019.

As of December 2020, the company had a 33% business share in the Indian DTH market. Other competitors in the field include Bharti Telemedia, Dish TV India, and Sun Direct TV, with a market share of 25.17%, 25.45%, and 16.35%, respectively.

TRAI data reveals that the total number of active Tata Sky subscribers has climbed from 70 million to 71 million between 2019 and 2020. It comes with a massive base of high-definition subscribers in India.

Who are the Major Investors of Tata Sky?

Tata Sky comes with a long list of both domestic and international investors. Tata Sons has a stake of 41.49% in this company, while 21^st Century Fox had 49% holding. Disney, however, comes with an additional share of 9.8% via TS Investments Ltd.

Baytree Investments Pte Ltd., which is an affiliate of Temasek, acquired 10% in FY 2007-2008. In addition, Tata Capital Ltd. and Tata Opportunities Fund bought an equity stake in FY 2012-2013.

A Closer Look into the Matter

The Tata Sky IPO will lead to the exit of several investors along with Disney. Disney has decided to sell off its stake in Tata Sky as it wishes to focus on Disney+.

The massive competition in the Indian OTT market right now has compelled Disney to exit its holdings in Tata Sky. The company has tried to bring other strategic investors on board but with little success. Hence, it has decided to go ahead with its public offering.

Disney is not the only major investor interested in diluting its stake in Tata Sky. Tata Capital and Temasek, who were long involved with the company, will also sell off a portion of their shares. As per officials, the company is working on its draft IPO prospectus, which is in the advanced stage right now. The prospectus will possibly be filed by next month.

Bottom Line

Tata Sky registered a slump in its revenue last year from Rs. 6,113 crores to Rs. 4,691 crores. It witnessed a collective loss of Rs. 234 crores for the fiscal year 2019-2020. Tata Sky has to ramp up its services to handle the fierce competition that it faces in the Indian market right now.

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Frequently Asked Questions

1. When is the Tata Sky IPO?

The Tata Sky IPO date has not been announced yet. The company will announce the dates as and when decided.

2. Which firms are advising Tata Group on this IPO?

Kotak Mahindra Capital, along with a few other international investment banks.

3. What is the price band of Tata Sky IPO?

The company is yet to decide.