Tata Sons, a holding company of the Tata Group has 60% stake in the DTH (Direct-To-Home) Tata Sky Ltd.

• DTH (Direct-To-Home) Tata Sky Ltd is loss-making company and thus, Tata Sons plans to sell a part of its share to private equity players and institutional investors and raise funds for the satellite TV company’s growth plans.
• Tata Sky Ltd is a joint venture of Tata Sons (60%), Temasek (10%) and Murdoch’s Network Digital Distribution Services (30%).
• Temasek is exiting the Tata Sky Ltd by selling its 10%  stake.
• Rupert Murdoch’s Network Digital Distribution Services will trim a part of its 30% stake.
• The company will still continue to use the “Tata” brand name.

Why this move by Tatas despite the recent digitization drive across India?

• The Indian DTH market is growing by double-digit % figures and the recent digitization drive across metro cities has added to this growth.
• Still the subscriber acquisition costs and churn rates remain high in this sector.
• There are weak earnings of 5% and lower returns on capital employed in this sector.