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India Value Fund gets FIPB approval to acquire 100% of Atria’s broadband biz

MUMBAI: Private equity firm India Value Fund Advisors (IVFA) has got the approval of the Foreign Investment Promotion Board (FIPB) to acquire 100 per cent of Atria Convergence Technologies’ (ACT) broadband business. The foreign investment is up to Rs 200 crore (Rs 2 billion).

BalaHowever, the shareholding in the cable TV outfits will remain unchanged. “The FIPB approval was needed for the broadband business only. The cable TV operations are run through downstream subsidiaries in compliance with the regulations and in association with local promoters. There will be  no shareholding changes in the cable companies. We have debt lines for Rs 100 crore (Rs 1 billion) and cable TV would require no extra funding,” ACT CEO Bala Malladi told TelevisionPost.com.

In Bengaluru, the cable TV operations are run through Kable First India where ACT has 74 per cent stake and the balance 26 per cent rests with the local promoters. A similar structure prevails in ACT Digital, which operates in Andhra Pradesh. In ACT Cable TV, which  operates in Nellore, the majority is with the local promoters while ACT has 49 per cent stake.

India Value Fund LogoIVFA holds around 70 per cent stake in ACT. The balance is held by CS Sunder Raju and K Nagaraju.

“The enabling permission for IVFA to take its stake up to 100 per cent in ACT’s broadband business has been obtained from the FIPB. IVFA currently has around 70 per cent stake in ACT. But if all the existing shareholders decide to pump in the investments proportionate to their stakes, there will be no change in the equity structure,” said Malladi.

Indium IV (Mauritius) through India Value Fund IV had sought FIPB clearance for making investment in ACT. The FDI proposal is up to Rs 200 crore (Rs 2 billion).

As per the proposal, IVF IV and IVF III-A together propose to invest in excess of 49 per cent up to 100 per cent by subscribing for equity/compulsorily convertible preference shares/fully convertible debentures of ACT.

ACT-logoACT’s plans to expand its broadband business has, thus, got a major boost with the FIPB approving ‘IVF’s Rs 200 crore (Rs 2 billion) foreign direct investment (FDI) proposal.

“We have recently launched in Vizag. We are soon going to launch our broadband service in Coimbatore,” said Malladi.

As reported earlier by TelevisionPost.com, ACT is eyeing a broadband subscriber base of one million in FY16. It is planning to invest Rs 300 crore (Rs 3 billion) in the expansion of broadband this fiscal.

ACT, which provides broadband through fibre-to-the-home technology, has already leapfrogged into the top league of internet service providers (ISPs) in India within a short span of time. It is the fourth-largest wired broadband service provider in India and operates in the states of Karnataka, Andhra Pradesh and Tamil Nadu.

As on 30 April 2015, the top five wired broadband service providers were BSNL (9.92 million), Bharti Airtel (1.44 million), MTNL (1.14 million), ACT (0.68 million) and You Broadband (0.45 million).

ACT acquired Hyderabad-based ISP Beam Telecom and went in for rebranding early this year. Beam Fiber, the broadband service brand of Beam Telecom, is now called ACT Fibernet. The company operates its broadband business in the states of Andhra Pradesh, Karnataka and Tamil Nadu.

ACT has 850,000 cable TV subscribers and is targeting one million by the end of FY16. The cable TV operations are concentrated in the states of Karnataka and Andhra Pradesh.

Meanwhile, the FIPB has approved the proposal of Today Magazines Lifestyle for foreign investment of 49 per cent by Netherlands-based Cooperatief International Publications through transfer and further issue for an aggregate consideration of Rs 2.05 crore (Rs 20.5 million).

The board has also approved Star India’s Rs 2,500 crore (Rs 25 billion) FDI proposal to acquire the broadcast business of Maa TV Network on a slump sale basis.

Altogether, the government has approved 16 proposals of FDI amounting to Rs 6,750.86 crore (Rs 67.5 billion) approximately.

The FIPB has once again deferred INX Music’s proposal to merge its Marathi music channel 9X Jhakaas with INX Music. INX Music, which has 70.85 per cent indirect foreign investment, proposes to undertake the additional activity of broadcasting of a non-news and current affairs channel in various Indian languages.

The proposal of Eros International Media for making downstream investment by way of acquisition of shares of an Indian company for non-cash consideration has also been deferred.

Hathway Cable and Datacom’s proposal for increasing foreign investment limit for FIIs, FPIs, etc. under the Portfolio Investment Scheme from 49 per cent of its issued and fully paid-up share capital to 74 per cent has been deferred.

DEN Networks’ proposal to increase foreign investment limit in the company beyond 49 per cent and up to 74 per cent by FIIs, NRIs, FPIs, and other eligible foreign investors through secondary market/open market purchase has also got deferred.

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