Tuesday 12-December-2017, 23:29
Looks like time is nearing for acquisition of Airtel Digital TV by Tata Sky as today Airtel has sold 20% stake in its DTH business to a private equity firm. I will try to explain why this happened. Currently according to cross holding regulations any foreign company cannot hold more than 20% directly (FDI) or more than 29% thru FII route in a vertically integrated business (distribution service providers like DTH, Cable etc.) , this means Tata Sky cannot directly buy Airtel DTH in this situation as their present shareholding will lead to Sky holding more than legal limit in the combined entity. After Airtel offloading 20%, Tata's will directly acquire rest of the stake & later when norms are relaxed then Star will buy the shares of equity investor.