MUMBAI: Kalanithi Maran-promoted Sun Direct has raised Rs 260 crore ( Rs 2.60 billion) in FY14 through rights issue to fund its capital expenditure requirement. Sun Direct’s existing shareholders—the Marans and Malaysia’s Astro Group—subscribed to the issue in proportion to their holding in the direct-to-home (DTH) company. While the Marans hold an 80 per cent stake in Sun Direct, the remaining 20 per cent is with Astro. The company raised Rs 140 crore ( Rs 1.40 billion) in September 2013. “Sun Direct has raised Rs 260 crore, out of which Rs 140 crore came first in September. The investment is in line with the shareholding pattern,” a source familiar with the development said. The rights issue comes on the back of Sun Direct’s appetite to expand in the cities covered under Phases III and IV of digitisation. With multi-system operators (MSOs) less entrenched in these markets and having invested heavily in the first two phases of digitisation, there is an opportunity for DTH operators to grow their subscriber base. Sun Direct has 9.2 million gross subscribers while the net subscriber base is six million, according to industry estimates. Around 36 per cent of its subscribers come from Tamil Nadu while the remaining three southern states of Andhra Pradesh, Karnataka and Kerala account for another 53 per cent. The churn is at 1 per cent over a 90-day period. The company’s acquisition cost per subscriber is around Rs 2,400, out of which Rs 1,000 is for set-top box (STB). Adding more subscribers, thus, requires capital infusion. Sun Direct is also planning to pare down its debt. The DTH company’s net debt is Rs 900 crore ( Rs 9 billion), the source said. Sun Direct’s payout to Sun TV Network as subscription fee has fallen to Rs 177.8 crore ( Rs 1.78 billion) in FY13, from Rs 183 crore ( Rs 1.83 billion) in FY12. Sun Direct was exploring the merger of Reliance Digital TV with itself but the negotiations fell through last year. The merger would have helped Sun Direct to expand in markets outside the southern region.
Source Sun Direct raises Rs 2.6 bn via rights issue | TelevisionPost.com
Source Sun Direct raises Rs 2.6 bn via rights issue | TelevisionPost.com
