Tulsi Tanti, chairman and managing director of Suzlon Energy, has picked up a 49% stake in cable TV firm Digital Outsourcing for around Rs 100 crore, reports Business Standard. Digital Outsourcing, floated in Januray this year, is a subsidiary of You Telecom, in which private equity firm Citigroup Venture Capital International (CVCI) has an 85% stake. While You Telecom has a 36% stake in Digital Outsourcing, the rest is held by high networth individuals.
The stake has been acquired by Tanti and his family, who own a 66% stake in Suzlon, in their personal capacity. Tanti’s investment comes at a time when Suzlon is looking to raise private equity funding to complete acquisition of Germany-based REpower. Suzlon was also said to be exploring possibilities of selling part of its promoters’ stake in its unlisted Indian units to private equity firms.
Cable TV is a rapidly expanding and a lucrative market in India. The country is set to become Asia’s leading cable market by 2010 and the most lucrative pay television market by 2015, according to estimates by Hong Kong’s Media Partners Asia.
Cable TV is being increasingly recognised as an attractive investment opportunity by HNIs and corporate czars as Tanti is not the only one investing. The promoters of Videocon Group, the Dhoot family, has also picked up a 14% stake in Mumbai-based broadband company IOL Netcom Ltd from open market this year. IOL Netcom has a presence in the Internet Protocol Television (IPTV) space in several metros.
PE funds like ChrysCapital and UK-based Ashmore Investment have investments in this space. ChrysCapital has picked up 12% in Hathway Cable for $60 million, while Ashmore has invested in Broadband Pacenet.
Tanti has started upping his personal investments. Tanti family’s Colossus Holdings formed a joint venture with Bahrain-based Arcapita Bank to buy Singapore-based Honiton Energy Holdings, which operates wind farms in China for about $500 million.
CVCI has a 85% stake in You Telecom, and Bennett Coleman & Company holds a 5% stake. The rest is held by the employees of the company. You Telecom, through Digital Outsourcing, acquired a majority stake in Scod18 Networking – an association of cable TV distributors in Mumbai – in April this year. It also acquired a 50% stake in Bangalore-based Digital Infotainment. You has cable TV operations in Mumbai, Bangalore, Visakhapatnam and Dharwad in Karnataka.