In a move seen as an attempt by India’s largest telecom company to pare its debt, Bharti Airtel and one of its subsidiaries will sell a combined 20 per cent in Bharti Telemedia Ltd., it’s DTH arm, to private equity firm Warburg Pincus for $350 million or Rs 2,255 crore.
While Bharti Airtel will sell 15 per cent stake in Bharti Telemedia Ltd, another Bharti entity will sell 5 per cent stake in the DTH paid TV service provider, a joint statement by Bharti Airtel and Warburg Pincus informed on Tuesday.
Once the transaction concludes, the parent company Airtel will own an 80 per cent stake in Bharti Telemedia while Viraj Sawhney, Managing Director, Warburg Pincus India, will join the Board of Bharti Telemedia.
“Airtel has enjoyed a very successful partnership with Warburg Pincus in the past and we are excited to partner with them once again in an attractive and fast-growing space,” Gopal Vittal, Managing Director and CEO (India & South Asia), Bharti Airtel, said in the joint statement.
“We look forward to working with Warburg Pincus towards achieving our vision of making Airtel TV India’s leading DTH platform,” he added.
Warburg Pincus was one of the early investors in Bharti, investing up to $300 million in Bharti Televentures Ltd, which was renamed Bharti Airtel in 2006, between 1999 and 2001 for about 19 per cent stake.
In 2002, Airtel decided to list itself on BSE that saw a reduction of Warburg’s stake to 15 per cent and later the private equity firm exited the company gradually.
Bharti Telemedia is the third-largest direct-to-home (DTH) company in India with a 21 per cent market share as of June, according to a report released by the Telecom Regulatory Authority of India (Trai).
Bharti Telemedia offers services under the Airtel TV brand, and had around 14 million subscribers and approximately $550 million in revenues during the 12-month period that ended on September 30, 2017.
Airtel TV, which was launched in 2008, has over 1,500 partners and over 1,58,000 recharge outlets in around 630 districts.
“The Indian Digital TV market is expanding rapidly and we believe that Airtel DTH is well positioned to capitalise on incremental growth in digitisation and new TV penetration in Tier 3 and 4 towns and rural areas,” said Vishal Mahadevia, Managing Director and Co-Head, Warburg Pincus India.
“We are pleased to be working alongside Sunil Bharti Mittal and the Bharti group again following our successful partnership many years ago, and we look forward to supporting the management team during the next phase of the company’s growth,” he added.