$300-mn boost to Videocon d2h

Silver Eagle Acquisition Corp makes the investment; to list on Nasdaq

Videocon d2h has started the year with a bang, with Nasdaq-listed Silver Eagle Acquisition Corp (SEAC) deciding to invest $300 million (Rs 1,900 crore) in it for a minority stake, valuing it at a whopping $1.2 billion.

As part of the agreement, the Indian direct-to-home TV service provider will list on Nasdaq. In exchange for the investment by SEAC, Videocon d2h will issue new stocks in the form of American depository shares.

Based in Mumbai, Videocon d2h is part of Venugopal Dhoot's $10-billion global conglomerate Videocon Group, which has interests in consumer electronics, oil & gas, power, retail and insurance.

As part of the transaction, SEAC's chief executive officer Harry Sloan and president Jeff Sagansky will join the board of the DTH company. Sloan had served as chairman and CEO of MGM in the past, while Sagansky was part of the top management of CBS and Sony Pictures.

Videocon d2h distributes about 500 digital television channels and other video and audio services to subscribers via direct satellite feeds.

Videocon d2h is the fastest-growing DTH service provider in India over the past few years and has emerged a top pay-TV company, winning several awards. The firm commenced operations in July 2009 and has since grown to a gross subscriber base of 11.8 million and a market-share of 16.5 per cent in Indian DTH as of September 30, 2014. For FY14, and the six months ended September 2014, Videocon d2h had 27.7 per cent and 26.1 per cent, respectively, of the incremental market share of the DTH subscriber base in India.

According to experts, this transaction marks a turning point for the Indian media sector.

It also puts the company on the global map; with a digitisation drive in full force for the next few years, consumers can soon expect services at par with Hollywood.

Group sources say the funds raised will be used to grow and double the DTH business in the next two years under the Videocon d2h brand. Last year, the company announced launch of 4K ultra-high definition set-top-boxes (STBs). Videocon d2h has acquired the technology to manufacture the STBs under its brand name in India.

Videocon d2h will be the first Indian DTH company to be listed on the Nasdaq and joins the club of other top Indian companies that are listed on the US exchanges. Currently, the portfolio of Indian companies listed on the exchange include banks such as ICICI Bank and HDFC Bank, information technology players Infosys and Wipro, pharmaceutical company Dr. Reddy's; film studio Eros International and travel portal MakeMyTrip.

Dish TV is the only listed DTH player in India as of now with a market cap of Rs 7,071 crore. Tata Sky, Airtel, and Reliance Digital are not listed.