CARE upgrades Dish TV credit ratings

New Delhi: After downgrading Zee Media’s credit ratings, rating agency CARE on Monday upgraded Dish TV India Limited’s credit ratings. Dish TV India Limited’s (DTIL) said that CARE Ratings Limited has revised the rating for the banking facilities of the Company from CARE A3 (A Three) to CARE A3+ [A Three Plus].

For short term bank facilities- term loan, CARE has revised credit ratings to A 3+; short term bank facilities- overdraft has been assigned A3+ credit rating; Short term bank facilities- bank guarantee’s credit ratings have been revised to A3+ from A3. The rating agency has also removed credit watch with negative implications.

The reason cited by CARE is the removal of support of the Essel group built into the ratings due to the weakened financial flexibility at Essel group level. Essel group’s ability to support the group entities when required. The ratings assigned to bank facilities of DTIL continue to factor in its high debt-funded capital investments, currency risk associated with procurement of Consumer Premise Equipment’s (CPEs) and the increasing competition faced both from peers and allied technology platforms.

Furthermore, the ratings also take into account the moderate liquidity position of the company, and the substantial provision made by DTIL (consolidated) towards license fee costs, which upon materialization would necessitate incremental debt funding and highly regulated DTH industry. The ratings also factor in the meagre gross addition to the subscriber base and the quarter-on-quarter (q-o-q) decline in the average revenue per user (ARPU) in FY19.

Dish TV’s stock has been boosted by the upgrade. The company’s stock at the time of going to press was trading at Rs 30.30, up by Rs 4.25 or 16% as compared to the previous close of Rs 26.05 on the BSE.

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