MUMBAI: Tata Sons, the promoter of The Tata group, is seeking to own a larger slice of its distribution platform operator Tata Play. It has sought approval from india's fair trade regulator, the Competition Commission of India (CCI), to acquire an additional 10 per cent stake in Tata Play. The stake will be purchased from Baytree Investments (Mauritius) Pte Ltd, an affiliate of Singapore's sovereign wealth fund, Temasek Holdings.
Currently holding a 60 per cent stake in Tata Play, Tata Sons’ acquisition will increase its ownership to 70 per cent. Tata Sons is an investment holding company registered as a core investment company with the Reserve Bank of India, classified as a systemically important non-deposit taking core investment company.
Tata Play, formerly known as Tata Sky, is a leading content distribution platform in India, offering pay TV and direct-to-home (DTH) services. it also operates Tata Play Binge, an over-the-top (OTT) platform that aggregates popular streaming apps under a single subscription model.
The proposed transaction has been notified to the CCI under sections 6(2) and 5(a) of the Competition Act, 2002. these provisions mandate regulatory approval for acquisitions exceeding certain thresholds.
Both Tata Play and Tata Sons have asserted that the transaction will not adversely affect competition in any relevant market. They have appealed to the CCI to examine the deal in the context of India's wired broadband internet services and the complementary linkages between Tata Sons’ internet services and Tata Play’s online platforms.
Meanwhile, the buzz of a transaction between Airtel and Tata Play taking place seems to have died down. Apparently, valuations are an issue and the further loss of subscribers by the pay TV ecosystem has put a dampener in any deal going forward, reveal sources close to the conversation. Also, the earlier transaction between the Essel group Dish TV and Videocond2h didn’t yield any clear identifiable long term benefits for the former as it struggles to sustain itself in a sector that is being gnawed away at by DD's free DTH service FreeDish, and low cost streaming services.
And going by the way that Tata Sons has applied to the CCI is it possible that the group has decided to retain its broadband part of Tata Play while letting go off of the video services portion the Distribution platform operator provides?If that is the case, then who is the buyer? Or is it that the group still sees potential in both the video and internet delivery components of Tata Play and has decided to continue to invest in both? The Tata group is not talking; neither is Tata Play.
Guess, we will have to keep watching this space.
