“There has been a lot of movement in the discussions between the two companies in the past few weeks,” one of the people said.
The Singapore government-owned company wants to sell its stake at a valuation of over $1 billion, another person said. This is far less than the $2 billion valuation that another stakeholder, Walt Disney Co, was eyeing in 2021.
“At one point, the Tata Play shareholders were looking at a valuation of close to $3 billion,” this person added.
Temasek said it does not comment on market speculation. Tata Group and Tata Play declined to comment.
A media veteran said a valuation of $1 billion for Tata Play will be a massive discount compared to what the company was valued for earlier. “Temasek has been desperately trying to exit Tata Play, but they have not been able to exit due to differences over valuation and failed attempts at doing a public listing,” he added.
Temasek first bought a 10% stake in Tata Play, which was earlier known as Tata Sky, for a reported ‘250 crore in 2007.
Experts say that the DTH business has been under stress due to subscriber churn from pay-DTH to DD Free Dish and over-the-top platforms.
“DD Free Dish is eating into the pay-DTH base in rural and semi-urban areas while OTT is chipping away at the top end of the customer base,” a media executive said on the condition of anonymity.
“Free cricket streaming by Disney+ Hotstar and JioCinema will cause a further dent in their subscriber base,” the executive added.
The active subscriber base of pay-DTH platforms declined by 1.37 million QoQ to 65.25 million in the quarter ended March, according to a Trai report. Tata Play had 21.3 million subscribers as of end-March.
Tata Play has ventured into the OTT aggregation business to make up for the loss from the DTH market.
Apart from Temasek, Walt Disney and Tata Opportunities Fund (TOF) are also looking to exit the company. Walt Disney, which got a 30% stake in Tata Play as part of its acquisition of Star India, does not identify DTH as its core business.
The Tata Group’s stake in the company are through Tata Sons (41.49%) TOF-owned Omega (7.8%) and Tata Capital (0.71%)
Tata Play is once again considering an initial public offering in order to give Disney an exit after multiple failed attempts to go public.
The company’s IPO plan was approved by the Securities and Exchange Board of India in May. Tata Play was the first Indian company to file confidential documents with Sebi for an IPO last year.
Tata Play recorded a net loss of ‘105 crore for the fiscal year ended in March 2023, compared with a net profit of ’69 crore the year before. Revenue from operations dropped 5.1% to ‘4,499 crore.
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