Tata Sons Increases Stake in Tata Play to 70% with $100 Million Acquisition from Temasek

Tata Sons, the holding company of India's Tata Group, has increased its ownership in Tata Play to 70% by acquiring a 10% stake from Singapore state investment firm Temasek for approximately $100 million. Tata Play has informed the Ministry of Information and Broadcasting about the change in shareholding, complying with regulations governing direct-to-home (DTH) companies.

With Temasek's exit, Tata Play will now operate as a 70:30 joint venture between Tata and Walt Disney, the latter inheriting its stake from the acquisition of Star India via the purchase of 21st Century Fox's India assets. Despite a decrease in valuation from its pre-pandemic target of $3 billion to $1 billion, Tata Play remains essential for the Tata Group as its main consumer-facing business in the media and entertainment sector, with 21 million subscribers.

Why this matters: The increased stake in Tata Play solidifies Tata Group's position in India's competitive media and entertainment landscape. As the sole consumer-facing media venture of the conglomerate, Tata Play's performance and growth prospects have significant implications for Tata's overall strategy in this sector.

Talks between Tata Sons and Disney about the latter's stake are underway, with Disney looking to exit Tata Play since DTH is not core to its business. Plans for both Temasek and Disney to exit Tata Play through an initial public offering (IPO) were postponed due to market conditions and challenges in the DTH sector. Tata Play had secured approval from India's market regulator for its proposed public issue in May 2023.

The transaction, which values Tata Play at around $1 billion, takes Tata Sons' stake in the entertainment content distribution platform to 70%. "Tata Play has informed the ministry of information and broadcasting about the change in shareholding, as required by regulations," a source familiar with the matter stated. The deal marks a significant milestone for Tata Group as it reinforces its presence in the media and entertainment industry.

Key Takeaways

• Tata Sons acquires 10% stake in Tata Play from Temasek for $100M, increasing stake to 70%.
• Tata Play now operates as a 70:30 joint venture between Tata and Walt Disney.
• Tata Play's valuation decreased from $3B to $1B, but remains essential for Tata Group.
• Talks underway for Disney to exit Tata Play, as DTH is not core to Disney's business.
• Tata Play secured approval for IPO in May 2023, but plans were postponed due to market conditions.