July 2017


Astro Malaysia Holdings is in talks to buy out Anil Ambani's DTH business, according to press reports.

Astro is reportedly carrying out due diligence of Reliance Digital TV, an arm of the listed Reliance Communications, and both companies are trying to arrive at a mutually accpetable sale valuation.


The move to sell Reliance Digital TV, is hardly news. The DTH platform has been up for sale for several years. Anil Ambani has not been able to find a buyer, for years.

Reliance Digital TV (DTH), has a mere 2% share of the Pay DTH market, with approximately 1.2 million subscribers. Apparently no new fund are being poured into the business and its subscriber numbers have not increased for more than a year.

Sale of a DTH platform is difficult, as its services and downlink cannot be merged with an existing platform, unless it is located close to, or on the same satellite as its partner.


Malaysia's Astro Group already owns 20% in Sun Direct, which is valued at ₹ 1,200 crore.

Sun Direct & Reliance Digital TV are colocated on the same satellite.

In fact, 3 years ago, there were reports that Reliance Digital TV may combine with Sun Direct. That deal did not culminate, probably due to valuations that Reliance Digital demanded.

It currently would be attractive if Astro & Sun Direct could acquire Reliance Digital at a low price.


Today Anil Ambani is under a mountain of debt and is under tremendous pressure to create liquidity. He may make a distress sale.

Reliance Communications' (RCom's) balance sheet has a debt of about ₹ 45,000 crore. RCom has been instructed by banks to reduce this debt by 60%, before end September 2017. Plans are to merge of its wireless business with Aircel and sell of its 51% stake in the tower unit to Canada's Brookfield.

A sale of RCom would yield much needed cash.


If Astro does buy out RCom's DTH, it would be its second deal with Anil Ambani and second Indian DTH deal too!

Astro's T Ananda Krishnan's Maxis Communications is a significant shareholder in Aircel, which is being combined with RCom's mobile operations.

Astro also has a 20% stake in SunDirect on the same satellite!


Will the sale go through ? Astro is probably pushing for a distress sale by RCom.

By Indian law, Astro can only purchase 25% directly. It will need an Indian partner to acquire the remaining 75% stake. Will Sun Direct be this Indian partner?

Interestingly, the TRAI has recommended that 100% foreign ownership be permitted in DTH. Star India which already owns maximum permissible stake in TataSky, has been pushing for 100% FDI in DTH. If it does come through in the next few weeks, RCom could be a major beneficiary.