Temasek plan to sell stake in Tata Play delayed over firm's valuation

Singapore state investor Temasek’s plan to sell its 10 per cent stake in Tata Play to its joint venture partner Tata Sons is delayed due to a valuation mismatch for the Indian satellite TV broadcaster, said banking sources.

Tata Sons is offering a lower valuation than $1 billion made for Tata Play, said the sources. Tata Sons has delayed listing the company after filing a confidential prospectus with the Securities and Exchange Board of India.

A Temasek spokesperson declined to comment. A Singapore-based source said the fund owned 10 per cent stake in Tata Play and not 20 per cent as reported earlier in a section of the media.

An email sent to Tata Sons was not responded to. Walt Disney owns 29.8 per cent stake in Tata Play and wants to exit the company via listing.

According to calculations made by Business Standard, Tata Play has an enterprise value of Rs 3,093 crore ($372) million based on its numbers for Financial Year 2022-23 (FY23). Data on the company’s net worth, total borrowings and cash & equivalent was used to arrive at the enterprise valuation.

The company reported a net loss of Rs 105 crore on a consolidated basis in FY23; its net sales were down 5.1 per cent year-on-year to Rs 4,499 crore.  Tata Play’s net sales in FY23 contracted by around 27 per cent from its all-time high net sales of Rs 6,104 crore in FY19 as over the top (OTTs) companies increased their market share in India. The decline in revenues made it tough for Tata Play to maintain its profitability and reported a net loss of Rs 70.8 crore in FY20 compared to a net profit of Rs 462.9 crore in FY19.

The company's net worth deteriorated to negative Rs 499 crore in FY23 from negative Rs 395 crore reported a year ago and negative Rs 45 crore in FY19. This was due to a continued rise in its accumulated losses which grew to Rs 2,857 crore in FY23 from Rs 2,753 crore a year ago, per company filings.