Dish TV to Raise Rs 1,000 Crore and Establish Subsidiary

Dish TV India Ltd. has announced plans to raise Rs.1,000 crore through the issuance of various securities. The company has not yet finalized the method for raising capital but is considering a range of options including equity shares, convertible bonds, debentures, warrants, preference shares, and foreign currency convertible bonds. These could be issued through preferential issues, private placements, qualified institutional placements, or other methods, both listed and unlisted. The board has approved seeking shareholder approval via a postal ballot for this fundraising.

New Subsidiary

In order to expand its digital footprint, Dish TV’s board has also greenlit the establishment of a wholly-owned subsidiary. This new entity will focus on the distribution of products and services through a digital platform and provide ancillary services. The proposed subsidiary will have an initial capital of Rs.10 lakh, which Dish TV will fully subscribe to under cash consideration. The name of the subsidiary is pending approval from relevant authorities.

Capital Allocation

The capital raised will be used to enhance Dish TV’s service offerings, invest in new technologies, and improve its infrastructure. By focusing on digital distribution, the new subsidiary aims to capture a larger market share in the rapidly growing digital services sector. 

Financial Performance

The company has faced challenging financial conditions recently. For Q4FY24, Dish TV reported a consolidated net loss of Rs.1989.69 crore, a significant increase from the Rs.1720.62 crore net loss in Q4FY23. Additionally, net sales declined by 19.4% y-o-y to Rs.406.95 crore in the Q4FY24 quarter. Despite these financial challenges, Dish TV’s stock saw a 6.49% increase, closing at Rs.15.91 yesterday.

Conclusion: In conclusion, the company’s official communication highlighted the board’s approval to explore and initiate the fundraising process through various permissible means under applicable laws as the establishment of the new subsidiary aims to strengthen Dish TV’s market position by leveraging digital platforms for product and service distribution.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.