(18 April 2007 9:30 pm)

MUMBAI: Essel Group promoters have offloaded nine per cent stake in Dish TV to a few institutional investors to raise Rs 4.45 billion (approximately $106 million).

The capital raised will be used to fund the expansion plans of Zee's demerged distribution companies, Dish TV and Wire & Wireless India Ltd (WWIL). The bulk of the investments will be towards customer acquisition including the subsidy towards set-top boxes (STBs).

The promoters have placed 38.4 million shares of Dish TV with 6-7 institutional investors. With this, their holding will drop to 58 per cent. Out of the block deals, 85 per cent has been placed with foreign institutional investors.

The placement was done by Enam Securities. "We are happy to have as our shareholders institutional investors who have a long-term perspective about DishTV’s future prospect and growth. With this fund raising, our objective was to provide funds to both Dish TV and WWIL for their expansion plans. Subsequently, both these companies would raise financing through fresh issuance of equity capital," says Essel Group chairman Subhash Chandra.

Meanwhile, Dish TV ended its maiden trading day down at Rs 102.55 on the Bombay Stock Exchange (BSE) after having opened at Rs 120. The scrip touched a high of Rs 120 and a low of Rs 100 during the day.

Based on the closing price, Dish TV's market capitalisation works out to Rs 44 billion ($1 billion). The direct-to-home (DTH) service provider is targeting a subscriber base of 10 million by 2010. The company claims to currently have over 1.9 million subscribers.

Essel Group runs key businesses which include Zee Entertainment Enterprises Limited, Zee News Limited, WWIL, Dish TV, news daily DNA and Essel Propack.