The Goel family is going through a rough patch because of high promoter debt to the tune of Rs 16,000 crore, and has put 50 per cent of its shareholding in Zee Entertainment
Enterprises on the block. At the end of the March 2019 quarter, the Zee promoters had pledged 66.18 per cent of their shareholding to the lenders. Dish TV is controlled and managed by Essel group Chairman Subhash Chandra’s brother Jawahar Goel.
Even in the case of Dish TV, the promoters have pledged 94.6 per cent of their 58 per cent shareholding in the company. Part of the money received from this deal will be used in repaying this debt, said sources. In an open letter in January, Subhash Chandra had said the acquisition of d2h was one of the group's mistakes. "My recommendation made to my brother Jawahar Goel to buy d2h from Videocon was one more key error, which cost me and Jawahar both a fortune," he had said.
On Wednesday, Dish TV’s share price closed at Rs 31.30, up 5.2 per cent from the previous day’s closing price, and the company’s market cap stood at Rs 5,763 crore. After the deal, the combined subscriber base of the merged entity will be 38 million.
Those in the know said negotiations between Airtel and Dish TV started in March, when the Goel family was asking for Rs 62 a share. However, given the emergence of JioFibre, and the debt burden of the promoters, negotiations have settled at Rs 45-50 a share.
Post-merger, sources reveal, Dish TV is likely to be the main brand under which the consolidated DTH
operations will be housed. According to the Telecom Regulatory Authority of India (Trai) performance indicator report for the quarter ended December 2018, the Indian DTH sector has 70.5 million paying subscribers. The report said Dish TV held 40 per cent of the market share and Airtel Digital TV 22 per cent, meaning the merged entity would command a 62 per cent market share. The merger would also mean Tata Sky would be a distant second with a 25 per cent market share.
The merger will lead to further consolidation in the DTH sector, as the number of private players has been whittled down to four -- Tata Sky, Sun Direct (12 per cent market share), and Anil Ambani-owned Reliance Big TV (1 per cent market share), in addition to the merged Dish-Airtel Digital TV entity. Besides, DD Freedish, the distribution service by Doordarshan, currently has an estimated 22 million subscribers.
Dish TV and Airtel Digital TV’s combined operations would try to take on JioGigaFiber, which analysts say will target urban audiences at launch. Dish TV’s reach is more mass going up to semi-rural areas after its acquisition of Videocon d2h in its fold. The combined entity reported 23.7 million subscribers at the end of FY19. Airtel Digital TV has around 14 million subscribers, taking the combined subscriber base to 38 million.