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Dish TV raises Rs 270 crore; promoters offload 5.8% stake
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#1
Dish TV, Country's no 1 DTH company, has informed that its founders have sold 5.8% stake in the company to raise Rs 270 crore.

Reports suggest that the shares were sold at Rs 49 per share.

According to the company, the raised amount will be used for getting hold of more customers for the next couple of years. DTH companies have to provide discounted packages as the competition is high after entry of Reliance, Sun Direct and Airtel.

It should be noted that, DTH companies subsidize the cost of set top boxes (STBs) so that they can acquire more customers and enjoy economies of scale.

Apart from Dish TV, TataSky, Airtel, Reliance Communications and Sun DTH are the other players in the segment.

In May, the company had approved raising $200 million by foreign currency convertible bonds.

At 1:18 pm, shares in Dish TV were down 14% at Rs 46.20 in a weak Mumbai market.

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#2
The promoters of Essel Group's direct-to-home (DTH) venture, Dish TV, have sold 5.8 per cent stake for Rs 270 crore to fund their share of a rights issue, following which it's shares plunged over 16 per cent on the Bombay Stock Exchange (BSE).

"The founders have sold about 5.8 per cent of the stake in the company to fund their share of the rights issue. The second tranche of the rights issue is due. So, the funds will be deployed back into the company for its payment." Jawahar Goel, managing director, Dish TV said.

Through block deal counter of the stock exchanges, the company has sold about 5.51 crore shares at a price of Rs 49 a piece, which brings promoters stake in the company down to about 74 per cent.

Last year, Dish TV had approved raising of Rs 1,140 crore through a rights issue, most of which was subscribed for by the founders because of a market slump. The company has raised more than Rs 300 crore in the first tranche through its rights issue.

Goel says, "Post rights issue, the promoter holding had risen to 80 per cent. So, they had to sell 5-6 per cent to keep 26 per cent stake free float. We expect to raise Rs 400 crore in the second tranche, which falls due in October 2009."

The first company to launch DTH service in India, Dish TV is now competing with four players – Tata Sky, Airtel Digital TV, Reliance's Big TV and Sun Direct – in a highly subsidised model.

Dish TV claims to have over five million subscribers. The company, which reported a loss of Rs 118 crore for the December 2008 quarter, hopes to report positive net profits in nine months.

Meanwhile, Essel's cable business Wire and Wireless India Limited (WWIL) informed BSE that its board of directors had approved raising Rs 192 crore through secured redeemable non-convertible debentures of Rs 10 lakh each placed with an institutional investors.

WWIL, the only one of two to have a licence for Headend in the Sky, has been running trials of the satellite-based cable distribution platform for about five to six months.

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