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DEN acquires 32.87% to become major owner of TV home shopping JV with Snapdeal
MUMBAI: Multi-system operator (MSO) DEN Networks has become a major shareholder in Macro Commerce, the TV home shopping joint venture (JV) with Jasper Infotech, the company that owns and operates e-commerce platform Snapdeal.
DEN has bought 32.87% from Jasper Infotech to take its total holding in Macro Commerce to 82.87%. The JV owns and operates TV home shopping channel DEN Snapdeal TV Shop.
The cost of acquisition is Rs 6 crore (Rs 60 million), which includes purchase of shares for Rs 1 crore (Rs 10 million) and subscription by way of rights issue for Rs 5 crore (Rs 50 million).
“DEN Networks has entered into an agreement with Jasper Infotech Pvt Ltd for increasing equity stake of the company in Macro Commerce. The increase in equity stake includes by way of subscribing and purchasing equity shares in Macro,” the company said.
The MSO has increased its equity for controlling stake, expansion of business and effective management of operations of the TV home shopping business.
Macro Commerce, which was incorporated on 1 February 2014, had a turnover of Rs 3.17 crore (Rs 31.7 million) in FY15 and Rs 28 crore (Rs 280 million) in FY16.
It was constituted to run a TV channel used as a market place platform for facilitating the sale of branded and unbranded merchandise.
In May, the Foreign Investment Promotion Board (FIPB) had deferred Jasper Infotech’s proposal for making downstream investment in Macro Commerce by purchasing 50% stake in the company from DEN Networks, its existing holding company.
This was the second time when Jasper’s proposal was deferred. The FIPB had in February deferred Jasper lnfotech’s proposal.
According to DEN Networks’ result for FY16, DEN Snapdeal TV Shop had annualised GMV of Rs 240 crore (Rs 2.4 billion). It had a total customer base of 1 million.
DEN Snapdeal TV Shop, which is available on the DEN, Reliance Digital TV, GTPL in Gujarat, Fastway and InDigital, had a reach of 52 million homes.
The JV had posted a net loss of Rs 44 crore (Rs 440 million) in FY16 on revenue of Rs 28 crore. Content cost, personnel cost and other operating expenditure stood at Rs 72 crore (Rs 720 million). In FY15, the net loss stood at Rs 10 crore (Rs 100 million) on revenue of Rs 4 crore (Rs 40 million). Content cost, personnel cost and other operating expenditure stood at Rs 12 crore (Rs 120 million).