Tata Play Set To File Confidential Filing For IPO

Tata Play, Tata Group’s entertainment arm formerly known as Tata Sky, is reportedly set to become one of the first Indian companies to file a confidential pre-filing of offer documents for an initial public offering (IPO) over the next two weeks.

According to an ET report, Tata Play is looking to raise INR 2,000-2,500 Cr from the IPO. The public offer would allow stakeholders including the Walt Disney Company to exit the company. Tata Group’s direct-to-home (DTH) service will also be raising some primary capital from the IPO for growth.

Tata Play has enrolled the services of Kotak Mahindra Capital, Bank of America, Citi, Morgan Stanley and IIFL as lead arrangers and book runners in the IPO.

Tata Sky was launched in 2004 as an 80:20 joint venture between Tata Sons and Network Digital Distribution Services FZ-LLC (NDDS), an entity of the 21st Century Fox. It was rebranded as Tata Play earlier this year before the plans for an IPO were announced in September.

After the Walt Disney Company acquired 21st Century Fox in 2019, the latter owned nearly a 30% stake in the joint venture. Tata Sons has a 41.49% stake in the company, with the rest being owned by other stakeholders such as Temasek.

This was a problem with the Indian government as the cross-holding rules in the media do not allow a broadcasting entity to hold more than 20% equity in DTH companies. Per media reports, Disney is now looking to offload the 10% equity stake that it holds out of the limits imposed by Indian media norms.

Tata Play had 18.3 Mn active pay subscribers as of March 31 and posted an operational revenue of INR 4,741 Cr and a net profit of INR 68.6 Cr for FY22.

What Is A Confidential Filing?

The DTH company’s move to go with a confidential IPO comes when the Securities and Exchange Board of India (SEBI) is expected to issue guidelines on confidential pre-filing of draft offer documents in the next few days.

The existing filing norms mandate companies to make public disclosure who have filed documents with SEBI. The companies going for an IPO also have to disclose sensitive business information such as market share, competitor analysis, consolidated financial statements, balance sheets and so on.

A confidential filing would allow companies to file draft documents without a public announcement and avoid making sensitive business information available publicly. In such a filing, an issuing company can delay a public filing until much closer to the IPO.

Globally, many jurisdictions such as the UK, Canada and the US permit pre-filing of the offer document for review by the regulatory authority. In case the issuers decide to proceed with the offer, the document is made available to the public.

SEBI first mentioned confidential filings in a discussion paper dated May 11. In the discussion paper, SEBI added that the Primary Market Advisory Committee (PMAC) had deliberated on the matter and favourably considered permitting a ‘pre-filed’ document.

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