Tata Sons buys Temasek's stake in Tata Play for ₹835cr
What's the story
Tata Sons has increased its stake in Tata Play to 70% by purchasing a 10% stake from Temasek, a Singaporean government-owned investment firm.
The deal, worth approximately $100 million (around ₹835 crore), was confirmed to the Economic Times by a high-ranking media executive who stated, "Tata Sons has bought out Temasek's stake in Tata Play."
The change in shareholding has been reported to the Ministry of Information and Broadcasting (MIB).
Valuation shift
Tata Play's valuation and future prospects
With 21 million subscribers, Tata Play is India's largest direct-to-home (DTH) company. It is currently valued at $1 billion.
This valuation marks a decrease from its pre-pandemic target of $3 billion.
Following Temasek's exit, Tata Play will now operate as a joint venture between Tata Sons and Walt Disney with a 70:30 ratio.
Potential acquisition
Tata Sons eyes Disney's stake in Tata Play
Tata Sons is reportedly in talks with Walt Disney to acquire its 30% stake in Tata Play.
Prior to the Temasek deal, Tata Sons owned 60% of the company while Disney held a 30% stake.
The US entertainment firm came into possession of its share through its acquisition of Rupert Murdoch-promoted 21st Century Fox's India assets, primarily Star India.
This move comes as DTH is not considered a core business for Disney.
Stake sale
Temasek's exit and Tata Play's IPO plans
Temasek entered Tata Play, previously known as Tata Sky, in 2007 via its affiliate Baytree Investments Mauritius.
The Singapore-based investment firm had been considering an exit from Tata Play for several years through an initial public offering (IPO).
However, challenging market conditions and issues in the DTH sector delayed the proposed IPO.
In May 2023, the Securities and Exchange Board of India (SEBI) approved Tata Play's proposed public issue.