Tata Sons increases stake in Tata Play to 70% as Temasek exits

Delhi: Tata Sons, the principal holding company of the Tata Group in India, has recently upped its stake in Tata Play, a leading satellite TV provider, to 70%. This increase came about through the purchase of a 10% stake from Temasek, the Singapore state investment firm, for approximately $100 million, as reported by various media outlets.

This strategic move was promptly reported to the Ministry of Information and Broadcasting, adhering to the necessary regulations that govern direct-to-home (DTH) service companies. 

According to news reports, following the transaction, Temasek has fully exited its position in Tata Play, which now operates as a 70:30 joint venture between Tata Sons and Walt Disney. Disney acquired its share through its earlier purchase of 21st Century Fox's assets in India, which included Star India.

Despite a significant drop in valuation from its pre-pandemic target of $3 billion to the current $1 billion, Tata Play continues to play a vital role within the Tata Group's portfolio, especially as its main consumer-facing business in the media and entertainment sector. 

Furthermore, it's been revealed that discussions are ongoing between Tata Sons and Disney regarding the latter's stake in Tata Play. Reports indicate that Disney is considering an exit from the venture as DTH services do not align with its core business strategies. 

Initially, plans for Temasek and Disney to reduce their stakes via an IPO were considered but have been shelved due to unfavorable market conditions and the general challenges facing the DTH sector.