YES Bank acquires 24.19% stake in Dish TV through pledged shares

The bank's move to pick up a stake in Dish TV comes following an invocation of pledged shares to the tune of 445.3 mn in the firm, the lender said in a filing to the stock exchanges late on Friday.

Private sector lender YES Bank has acquired 24.19 per cent in Dish TV, making it the second-largest shareholder in the direct-to-home (DTH) company.
 
The bank’s move to pick up a stake in Dish TV comes following an invocation of pledged shares to the tune of 445.3 million in the firm, the lender said in a filing to the stock exchanges late on Friday night.
 
The promoter family, led by Jawahar Goel, brother of Essel group promoter Subhash Chandra, now owns 30.37 per cent in Dish TV, counted among the leading DTH players in India with net sales of Rs 6,166 crore (for FY2018-19). The promoter family earlier held 54.56 per cent in the company, its March 31, 2020, shareholding pattern shows.
 
As of Friday’s close, Dish TV’s market capitalisation stood at Rs 788 crore. The firm has shed 67 per cent of its value since January this year.
 
This is the sixth such transaction by YES Bank in a year in various companies. Last year, YES Bank had invoked pledged shares of CG Power, Cox & Kings, and Reliance Infrastructure. While earlier this year, it had invoked pledged shares of Reliance Power and Sical Logistics, as investor pressure to reduce its exposure to debt-laden firms grows. As of March 31, 2019 (FY19), Dish TV’s debt stood at Rs 2,758 crore.

 
 It is yet to declare its full-year FY20 results.
 
Pledged shares as a percentage of promoter shareholding in Dish TV now stands at 88.31 per cent. At the end of the March 2020 quarter, it stood at 93.43 per cent.

YES Bank clarified on Friday that the decision to buy stake in Dish TV was a "one-time" affair.
 
"The shares have been acquired subsequent to a default of the terms of the credit facilities sanctioned by YES Bank to Essel Business Excellence Services, Essel Corporate Resources, Living Entertainment Enterprises, Last Mile Online, Pan India Network Infravest, RPW Projects, Mumbai WTR and Pan India Infra projects," it said in its note to the stock exchanges.
 
Last year, Chandra and his family had to offload a 16.5 per cent stake to existing investors in Zee Entertainment, the flagship firm of the Essel group, to pay off promoter loans.

 
While Chandra stepped down as Zee chairman in November last year, he and his family retained management control in Zee with only 5.9 per cent stake. His son Punit Goenka was reappointed Zee MD and CEO from January 1 this year.
 
Dish TV, on the other hand, which had been talking to Airtel DTH, for a possible merger had to call off the deal in February following differences over valuation. It has since been talking with global financial investors for a stake sale, which is yet to fructify.
 
According to the Telecom Regulatory Authority of India, Tata Sky has a market share of 31.61 per cent in the DTH market, followed by Dish TV at 31.23 per cent and Airtel DTH at 23.39 per cent respectively.