Warburg 20% stake in India’s Airtel DTH

Private equity investment house Warburg Pincus has taken a 20 per cent stake in Bharti Airtel’s DTH arm, paying $350 million, the third-largest DTH operator in India.

The agreement, signed December 12th, sees the transaction take two parts. The first is to take a 15 per cent stake directly from Bharti Telemedia, the parent of the DTH division, and will be followed by the transfer of a 5 per cent share from another division of the Bharti enterprise, and in the process reducing Bharti’s overall share of the DTH business to 80 per cent.

Bharti Telemedia claims some 14 million subscribers and annual revenues of about $550 million [€468m] (as at September 30th).

Warburg will be using its Lion Meadow Investment fund to engineer the transaction.

The move is seen locally as being part of the increasingly attractive Indian DTH and cable TV sector and where the top five players in the sector are either already profitable or have profits in sight.

“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,” commented Warburg Pincus India MD and Co-Head Vishal Mahadevia. “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.”

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