Tata Sky plans to raise Rs 2000 crore via IPO

Right at the time of implementation of compulsory digitization in India, Tata Group’s Tata Sky is planning an IPO to raise about Rs 2000 crores by putting on offer 25% stake, sources with direct knowledge said. Tata Sky expects a valuation of Rs 8000 crores when it hits the capital market. Sources suggest that the IPO process has just begun and Tata Sky is planning an IPO by the second half of the next calendar year.

Sources who are familiar with the development say that the IPO process is at a nascent stage and the owners have begun informal talks with the banks regarding the issue. Tata Group holds 60% stake in Tata Sky along with Star India at 30% stake and Temasek’s Bay Tree Investments holds 10% stake in the company. Tata Group has declined to offer any comment on the development.

Tata Sky ended the last fiscal with a loss of Rs 298 crores and net sales of Rs 1590 crores. Total accumulated losses for Tata Sky stand at Rs 4303 crores at the end of the last fiscal. Dish TV, the only listed company in the sector has a market cap of Rs 8000 crores with a subscriber base of over 13 million. Tata Sky has 10 million subscribers. Analysts point out that the conversion from analog to digital will open up a huge opportunity for these companies. Experts say that Tata Sky’s high-end subscriber profile could be a key driver in commanding decent valuations at the time of the IPO.