Dish TV founders sell stake, shrs plunge
(Adds details, quotes, updates share price)
* Dish TV founders sell stake to raise funds
* Funds needed to pay founders' share of rights issue
* Shares slump 16 pct on concerns of stake dilution
MUMBAI, June 8 (Reuters) - Founders of direct-to-home operator Dish TV India Ltd (DSTV.BO) on Monday sold 5.8 percent in the company to fund their share of the rights issue, sending its shares tumbling as much as 16 percent.
Founders raised 2.7 billion rupees, selling shares at 49 rupees each, Managing Director Jawahar Goel told Reuters. This is a discount of nearly 9 percent to Friday's closing price.
Last year, the company had approved raising 11.4 billion rupees through a rights issue, most of which were subscribed for by the founders because of a market slump, Goel said.
"The second tranche of the rights issue is due. So, the funds will be deployed back into the company for its payment," Goel said over the telephone.
Shares plunged 16 percent after the sale, and were trading at 45.75 rupees, down 14.8 percent, at 2.19 p.m. on concerns promoters were diluting their stake, dealers said.
Analysts, however, are optimistic about the firm's medium-term outlook.
"Its a positive sign. This was the most likely way of funding. It's wrong to view it as a typical promoters' stake dilution," Sahil Desai, an analyst with Enam Securities, which has an 'outperformer' rating on the firm, said.
The sale could have been a mode of increasing the free float in the stock, another analyst at a Mumbai-based brokerage said.
"The promoters stake had risen to 80 percent after the rights issue. So, they had to sell 5-6 percent to keep 26 percent stake free float," he said. Earlier in the day, around 65.88 million shares, or 6.96 percent of the equity of the company, changed hands on the Bombay Stock Exchange and the National Stock Exchange in a series of block deals, according to data from the exchanges.
The weighted average price of the trades was 50.35 rupees. All block deals took place within the first 15 minutes of trading, according to the exchange data.
In May, the company had also approved raising up to $200 million by foreign currency convertible bonds. "The money is required for subscriber acquisition, mainly," Goel said.
(Reporting by Swati Pandey and Jasudha Kirpalani; Editing by Ramya Venugopal)
((swati.pandey@thomsonreuters.com; +91 22 6636 9123; Reuters Messaging: swati.pandey.reuters.com@reuters.net))
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