Bharti Airtel is looking to divest 20-25 per cent stake in its Direct-to-Home (DTH) business and has approached private-equity players for the same.
The company’s move comes after the Government last year increased the foreign direct investment limit in DTH and digital cable companies to 74 per cent.
Rival firm Videocon d2H is also planning to raise an estimated Rs 700 crore through an initial public offering.
Airtel is learnt to be looking at a valuation of about $1 billion, but has declined to comment officially on the same.
As of December, the company had a total subscriber base of 7.9 million.
With the Government planning to implement Digital Addressable System (DAS) by 2014, DTH and Multi-System Operators are aggressively looking to grab subscribers.
In the second phase, 38 cities are expected to go digital by end-March.
According to Government estimates, nearly 1.6 crore STBs are expected to be installed.
The three metros New Delhi, Kolkata and Mumbai have gone digital in the first phase.
Making loss
DTH players have said that the industry, which is capital-intensive, is under losses as they offer set-top boxes at a subsidised rate to consumers. The DTH industry also needs to expand capacity to carry upto 500 channels to be able to compete with MSOs.
This will require additional transponder capacity. Currently, most DTH players on an average carry 300 television channels.