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On April 30 2024, ET reported that Tata Sons increased its stake in Tata Play to 70% by acquiring Temasek’s 10% share for approximately $100 million. The transaction valued Tata Play at $1 billion, significantly lower than its earlier $3 billion valuation.
"Commission approves the acquisition of certain additional shareholding in Tata Play Limited (Tata Play) by Tata Sons Private Limited (Tata Sons) from Baytree Investments (Mauritius) Pte Ltd. The Proposed Combination involves the acquisition of 10% shareholding in Tata Play by Tata Sons," the CCI stated in its press release on Monday.
Tata Sons, an investment holding company, is registered as a core investment company with the Reserve Bank of India and classified as a “Systemically Important Non-Deposit Taking Core Investment Company.”
Last year, the CCI had also approved Bharti Airtel’s acquisition of an additional 20% stake in its DTH arm, Bharti Telemedia, from Lion Meadow Investment Limited (LMIL), an affiliate of New York-headquartered PE firm Warburg Pincus.
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Bharti Airtel acquired Warburg Pincus affiliate's 20% stake in Bharti Telemedia in February 2021 for Rs 3126 crore, primarily through the issuance of 36.47 million equity shares of Airtel at Rs 600 per share and up to Rs 1037.8 crore in cash.
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The acquisition raised Bharti Airtel’s stake in Bharti Telemedia from 80% to full ownership, valuing the DTH company at Rs 15,630 crore.
Tata Play is also in discussions with Bharti Airtel to merge their DTH businesses. In a regulatory filing, Bharti Airtel confirmed that both companies are engaged in bilateral talks to explore a potential combination of Tata Play and Airtel's DTH arm, Bharti Telemedia, in a mutually agreeable structure.
While Airtel emphasised that discussions are ongoing, sources had informed ET that the merger is likely to be executed through a share-swap arrangement, making Airtel the majority stakeholder with over 50% of the combined entity.
Both companies are expected to finalise a heads of terms agreement soon, kickstarting the due diligence process. Post-merger, Airtel is projected to hold 52-55% of the new entity, while Tata Play’s stakeholders, including Walt Disney, would retain 45-48%.
The new company is likely to be led by Airtel’s senior management, with Tata seeking two board seats. Industry sources estimate the combined valuation of both DTH businesses at approximately Rs 6,000-7,000 crore.
Tata Play’s consolidated net loss widened to Rs 354 crore in FY24 from ?105 crore the previous year, whereas Bharti Telemedia’s net loss narrowed to Rs 76 crore from Rs 349 crore. Tata Play’s consolidated revenue stood at Rs 4,327 crore, up from Rs 4,529 crore, while Bharti Telemedia’s revenue grew to Rs 3,045 crore from Rs 2,945 crore.
