Videocon group's Bharat Business Channel Ltd, which operates the direct-to-home (DTH) business service under the Videocon d2H brand, is planning to raise up to Rs 700 crore via initial public offering.
The company, which has filed its documents with the market regulator Securities and Exchange Board of India (Sebi), is also looking to raise up to Rs 50 crore by pre-IPO placement of up to 10 million shares.
The company intends to utilise Rs 4,88.22 crore out of the net proceeds towards acquisition of set-top boxes, outdoor units and accessories and Rs 69.58 crore towards repayment/prepayment of certain of its outstanding term loans.
If the promoters decide to dilute minimum 25% stake, the valuation could be as high as Rs 2,800 crore. However, if they keep the price point similar to its last equity issue (rights issue) of Rs 50 per share, it will end up diluting close to 36% at a valuation of Rs 1,900 crore.
In its document, the company disclosed that for the six months ended September 2012, the company's total revenues stood at Rs 493 crore with a net loss of Rs 270 crore. It incurred a net loss of Rs 1,140 crore in the three previous financial years and has a negative net worth of Rs 589.8 crore as of September 30, 2012.
Videocon D2H, the last player to enter the DTH market in India, commenced operations in July 2009. As of September 30, 2012, it has 6.62 million gross subscribers, approximately 13% of the total DTH subscriber base in the country.
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The only other listed DTH player, Dish TV, has a market capitalisation of Rs 8,438 crore.
Enam Securities (Axis Capital) and UBS are the joint global co-ordinators and book running lead managers (BRLMs) to the issue. IDBI Capital, SBI Capital and Yes Bank are the other three BRLMs.