MUMBAI: Star India, the Indian subsidiary of Rupert Murdoch’s News Corp, proposes to up its effective stake in the joint venture direct-to-home (DTH) company Tata Sky.
Star India has applied for FIPB (foreign investment promotion board) clearance to buy a 49 per cent stake in Tata Group’s investment firm TS Investments. The firm will buy a 20 per cent stake in Tata Sky for Rs 3.24 billion.
Effectively, Star India will get additional 9.8 per cent stake in Tata Sky, increasing News Corp’s total holding in the DTH company to 29.8 per cent.
Currently, News Corp holds 20 per cent while Tatas holds 70 per cent stake in the DTH company. In 2007, Temasek had acquired 10 10 per cent stake in Tata Sky for $56 million.
At present, there is a cap of 20 per cent FDI in the DTH sector, while the ceiling on foreign holding is 49 per cent. However, the government made amendments to the FDI policy last year that stated that investment through companies owned and controlled by Indians would not count in the calculation of foreign investment.
Tata Sky officials did not want to comment on the issue. Tata Sky MD & CEO Vikram Kaushik was not available for comment.
A source familiar with the development, however, said that the Murdoch company had applied to the FIPB for upping its stake in Tata Sky. "News Corp could have taken its effective stake to 39 per cent as Temasek holds 10 per cent. But the Tata Group was not willing to dilute its stake further at this stage," the source added.
Tata Sky has over 4.5 million subscribers and is the third largest DTH operator in the country, behind Dish TV and Sun Direct. In terms of ARPUs, however, it would stand higher among the others.
