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Tag: Odhisa

  • DAS Phase III: MIB’s big dilemma

    DAS Phase III: MIB’s big dilemma

    MUMBAI: The past fortnight has seen High Court directives in five different states make a mockery of the 31 December, 2015 deadline set by the government for the Phase III roll out of digital addressable system (DAS).

     

    The courts have urged the Ministry of Information and Broadcasting (MIB) to not act against multi system operators (MSOs) and cable operators who have not been able to place set top boxes (STBs) in homes for two months. In essence, the DAS sunset date has been extended in Andhra Pradesh, Telangana, Sikkim, Maharashtra, Odhisa, Tamil Nadu and now Guwahati.

     

    The Bombay High Court specifically cited a Supreme Court judgment and noted that a stay granted by a high court on a central notification in one state would be applicable in other states as well. That was the case of Kusum Ingots vs the Union of India, in 2004. (http://indiankanoon.org/doc/1876565/)

     

    The question on everyone’s mind is: would other petitioners in other states under the DAS Phase III ambit also approach their respective High Courts for relief? Hence, did it make sense for broadcast networks to continue with digitally encrypted signals, which they had resorted to once the clock struck midnight of the new year?

     

    Most of them including Viacom18, Star India, Zee and Sony thought it did not. Hence, they have all switched on their analog signals a day or so after switching them off.

     

    Now that has put the MIB in a bit of a quandary. The team lead by MIB secretary Sunil Arora – and including special secretary JS Mathur, and joint secretary RS Jaya apart from other members – have been driving DAS III digitisation and were quite clear that no extension should be given. 

     

    Sources indicate that one line of action being considered by the MIB is to approach the Supreme Court for relief against the restraint orders granted by the various courts. Experts such as Supreme Court advocate KV Dhananjay have argued against the stance taken in the Kusum Ingots case by the courts. (http://www.legallyindia.com/Blogs/some-hc-judges-are-becoming-terribly-ignorant-of-our-constitution)

     

    Whether the MIB will go ahead and approach the Supreme Court or not is a moot point, but the industry is putting its might behind it. Most of the industry associations like the Indian Broadcasting Foundation, the DTH Operators Association and the MSO Alliance have all reportedly urged the ministry to move the apex court.

     

    Industry believes that the extension is unlikely to serve any purpose, as cable operators knew of the phased rollout of DAS as much as for the past three to four years and hence they could have prepared for it. Complaining about a shortage of STBs or interconnect agreements or capital post the sunset date is simply facile, professionals state. 

     

    “The analog switch off is mandatory,” says an industry observer. “Digitally encrypted signals need to be the only mode of television delivery via satellite in India in Phase III areas. Private DTH operators and the government owned FreeDish can deliver television wherever there are signal dark areas courtesy cable TV’s unpreparedness. The government needs to approach the courts to ensure that DAS Phase III proceeds as soon as possible.”

     

    We will have to wait and watch if it does.

  • Ortel IPO closes; goes through by a whisker

    Ortel IPO closes; goes through by a whisker

    MUMBAI: It was meant to be a test of whether investors have confidence in the media – and more specifically in India’s relatively nascent cable TV sector. And the verdict is that while retail and HNI investors don’t, institutional investors definitely do.

     

    We are referring to the Ortel Communications IPO which closed today. The regional cable TV MSO which approached the market to raise funds for its growth plans, said in a statement, quoting a Kotak Mahindra Capital spokesperson: ““The Ortel IPO has been successfully closed today. Ortel has successfully raised its entire primary capital requirement as stated in the IPO Red Herring Prospectus, along with providing partial exit to New Silk Route (NSR). The QIB segment has been fully subscribed with participation from  Mutual Funds and Insurance companies.The net under subscription in the HNI and Retail segments will reduce the offer for sale component by NSR.”

     

    Simply translated the latter part of that statement means that NSR – its private equity investor – had decided to cut back on the amount of shares it was offering to the public.

     

    At the time the IPO commenced with the price band at Rs 181-200, 12 million shares were on offer for investors. Six million of these were coming from the NSR stable, while Ortel was issuing another six million freshly. With Kotak Mahindra Capital as the issue manager, Ortel managed to rope in  Axis Mutal Fund and ICICI Prudential came in as anchor investors. Both picked up 2.55 million shares (0.9 million to Axis and 16.55 million by ICCI) for Rs 46.2 crore at the lower range of the price band.

     

    That left about 9.45 million shares on offer to qualified instituitional bodies (QIBs) and retail/HNI investors. Bids were received for 7.12 million shares of these by day three of the issue. Thus the public offer was subscribed up to 0.75 time. Overall,  9.68 million shares, including the anchor component,  were lapped up totally or 81 per cent of the issue. The QIBs totally subscribed to what was available for them.

     

    NSR, which was making a secondary sale, decided to lop off the the  shares it was selling 3.67 million, meaning only 61 per cent of its offer was subscribed. It was aiming to raise Rs 108-120 crore through the offfer.

     

    Ortel, on its part, was was looking at raising  Rs 120 crore through the fresh issue.

     

    The Kotak Mahindra spokesperson told indiantelevision.com that the retail investors don’t really understand the potential of cable TV while institutional investors do. “Hence, the QIB portion has been totally subscribed. Ortel has managed to raise all the growth capital it needs for the next two to three years,” he said. “Hence, retail investors who missed this IPO will have to opt for secondary market purchases.”

     

    Estimares are that Ortel would end up raising around Rs 175 crore crore through the IPO. But the final tally totted up to Rs 175 crore-odd, according to Press Trust of India reports.