New Delhi: The government is said to have cleared the decks for leading broadcaster Star India to not only increase its stake in direct-to-home (DTH) venture Tata Sky but also pump over Rs 320 crore into the company. This may well be the single-largest investments in the media sector in last one year.
Tata Sky is currently the third-largest DTH operator with over 5 million subscriber base and is looking for investments to take on competition in a six-player, 24 million DTH subscriber market. Tata Sky is a joint venture between Star and Tata Sons. After this move, the stake of Tata group will come down from the current 70% to 50% while that of Star will go up effectively to 30%. 😎
According to sources, this became possible after the Foreign Investment Promotion Board in its last meeting cleared the proposal of Star to form a joint venture company--TS Investments--with the Tata group which in turn will pick up 20% stake in Tata Sky. Post this approval; there will be four shareholders in Tata Sky namely Tata Sons (50%), TS Investments (20%), Baytree Investments Mauritius (10%) and Network Digital Distribution Services (NDDS) of Dubai (20%). While NDDS is a Star group company, TS Investments will have Star as 49% partner with Tata group.
This means the effective holding of Star in Tata Sky will touch 30%, much higher than permissible under the cross-media restrictions for the DTH sector. Star India is also a leading broadcaster operating around a dozen television channels in the country. The current DTH licensing norms state that no broadcaster will hold more than 20% in any DTH company and vice-versa.
According to I&B ministry, only those entity that hold the uplink and downlink permission qualify as broadcasters. In this case, the applicant is Star India B.V., an offshore company formed in the Netherlands. Also, it is NDDS, a UAE-based Star's subsidiary that holds the permissible 20% foreign direct investments in Tata Sky. Neither Star India BV, nor NDDS hold the uplink and downlink license in India therefore they do not qualify as broadcaster, the I&B ministry has maintained paving the way for Star to increase its stake in Tata Sky, sources said.
Source:
Star gets nod to raise stake in Tata Sky
Tata Sky is currently the third-largest DTH operator with over 5 million subscriber base and is looking for investments to take on competition in a six-player, 24 million DTH subscriber market. Tata Sky is a joint venture between Star and Tata Sons. After this move, the stake of Tata group will come down from the current 70% to 50% while that of Star will go up effectively to 30%. 😎
According to sources, this became possible after the Foreign Investment Promotion Board in its last meeting cleared the proposal of Star to form a joint venture company--TS Investments--with the Tata group which in turn will pick up 20% stake in Tata Sky. Post this approval; there will be four shareholders in Tata Sky namely Tata Sons (50%), TS Investments (20%), Baytree Investments Mauritius (10%) and Network Digital Distribution Services (NDDS) of Dubai (20%). While NDDS is a Star group company, TS Investments will have Star as 49% partner with Tata group.
This means the effective holding of Star in Tata Sky will touch 30%, much higher than permissible under the cross-media restrictions for the DTH sector. Star India is also a leading broadcaster operating around a dozen television channels in the country. The current DTH licensing norms state that no broadcaster will hold more than 20% in any DTH company and vice-versa.
According to I&B ministry, only those entity that hold the uplink and downlink permission qualify as broadcasters. In this case, the applicant is Star India B.V., an offshore company formed in the Netherlands. Also, it is NDDS, a UAE-based Star's subsidiary that holds the permissible 20% foreign direct investments in Tata Sky. Neither Star India BV, nor NDDS hold the uplink and downlink license in India therefore they do not qualify as broadcaster, the I&B ministry has maintained paving the way for Star to increase its stake in Tata Sky, sources said.
Source:
Star gets nod to raise stake in Tata Sky