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Hinduja Ventures sells small stake, reinforces valuation of IMCL at Rs 3,444 cr

MUMBAI: The benchmark valuation of Hinduja-promoted IndusInd Media & Communications Ltd (IMCL), which owns and operates cable TV business under InCablenet and In Digital brands, is set at Rs 3,444.06 crore (Rs 34.44 billion).

Diluting stake in IMCL in a series of small transactions, Hinduja Ventures Ltd (HVL) has ensured that the valuation of its cable TV subsidiary remains undisturbed. Along with the proposed merger of the Hinduja Group’s headend-in-the-sky (HITS) business with IMCL, the new moves could be seen as a precursor to an initial public offering (IPO) of the merged entity.

IMCL-cover01In a new transaction, HVL has offloaded 0.13% stake in IMCL to an undisclosed third party for Rs 4.66 crore (Rs 46.6 million). The company has sold 100,000 equity shares in IMCL at a price of Rs 466 per share. The transaction is based on an independent valuation by a third party.

After the new disinvestment, HVL’s holding in IMCL reduces to 60.43%.

The value of IMCL remains unchanged at Rs 3,444.06 crore after the new round of stake sale. In October, HVL had sold 1.35% stake, or 10,00,000 shares, at Rs 466 per share for Rs 46.60 crore.

“After the HITS business moves from Grant Investrade Ltd (GIL) to IMCL, the cable company could go for an IPO,” a source said.

Earlier in the year, HVL had upped its stake in IMCL. In July, HVL purchased 5.82% stake in IMCL from its subsidiary GIL for Rs 200.5 crore (Rs 2.01 billion). Following the transaction, the company’s holding in IMCL had increased to 61.91%.

HVL is in the process of merging its HITS business into IMCL. After the merger, IMCL will provide HITS and cable TV services across India.

IMCL has three million digital customers in Phases I and II of digital addressable system (DAS). The company has another four million analogue customers in Phase III and IV.

After the completion of digitisation, IMCL is expected to have a digital cable TV base of seven million customers. IMCL is present in 32 cities spread across 14 states.

In FY16, IMCL narrowed its net loss by almost 53% to Rs 112.77 crore (Rs 1.13 billion) compared to Rs 239.19 crore (Rs 2.39 billion) a year ago. Revenue from operations slid 4.58% to Rs 434.4 crore (Rs 4.34 billion) from Rs 455.27 crore (Rs 4.55 billion) in the trailing fiscal. Total expenses fell 13.62% to Rs 594.55 crore (Rs 5.95 billion) from Rs 688.37 crore (Rs 6.88 billion).

For the fiscal year ended 31 March 2016, GIL posted a net loss of Rs 32.71 crore (Rs 327.1 million) on a revenue of Rs 22.40 crore (Rs 224 million) and expenses of Rs 47.09 crore (Rs 470.9 million). The delay in DAS Phase III implementation played a major part in GIL’s performance.

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