Bharti Airtel sells 20% stake in DTH arm to Warburg Pincus for $350 million

             Bharti Airtel sells 20% stake in DTH arm to private equity firm Warburg Pincus for Rs 2258 crore . Bharti Telemedia offers DTH services under the Airtel TV brand. Proceeds will go to Bharti Airtel group’s telecom firm which will likely be used  to fight off the competition from Reliance Jio Infocomm. Under the deal, Bharti Airtel will sell 15% stake in Bharti Telemedia, while the remaining 5% will be sold by another Bharti entity.

Airtel sells 15% stake in the DTH business to Warburg Pincus entity Lion Meadow Investment for Rs 1623.76 crore. Another group company that holds 5% of Bharti Telemedia will offer its entire stake to the PE firm. The total deal value of Bharti Telemedia amounts to Rs 11300 crore. Bharti Telemedia has become the India’s second largest DTH player by latest valuation by experts. Dish TV is the only listed DTH firm. This is the second time that Warburg Pincus is taking a stake in the Bharti Group. For Warburg Pincus India, the deal is a step towards capitalising on India’s large consumer base.

         Airtel had a very successful partnership with Warburg Pincus in the past and they are excited to have a partnership with them once again in this fast growing space. DTH under the Airtel TV brand, which was launched in 2008, has over 1,500 partners and over 1,58,000 recharge outlets in around 630 districts and has subscribers of 14 million.During the year  2017, Bharti Telemedia reported a gross revenue of 3430.6 crore which means 17.6% higher from a year earlier. Its earnings before interest and tax for the period was doubled to Rs 357.7 crore. The company on 10^th December 2019 stated its revenue for the 12-month period ended 2017 at Rs 3550.

         Airtel has been liquidating its non-core assets to clear debt and for various activities to fight against the competition in the telecom sector. Earlier this year, it sold an 18.5% stake in tower arm Bharti Airtel for Rs 12000 crore. At the end of September, Bharti Airtel had a total debt of Rs 91480 crore. They had tried to sell a part of the DTH business and recently held discussions with the Tata Group. Though that didnt go through Airtel agreed to buy Tata’s mobile business under a cash-free, debt-free deal.