PE Backed DEN Networks files for an IPO

The company has till now raised Rs 200 crore in two tranches from funds managed by IL&FS Investment Managers (IIML).

DEN Networks, a private equity backed multi-system operator (MSO), has filed its prospectus with Securities and Exchange Board of India (SEBI) for a public issue. The company has till now raised Rs 200 crore in two tranches from funds managed by IL&FS Investment Managers (IIML). The company has been promoted by IBN18 Broadcast Managing Director Sameer Manchanda with Raghav Bahl (Promoter & Chairman Network18 Group).With this initial public offering, the company is looking to raise around Rs 280-300 crore.

For FY09, DEN reported revenues of Rs 719 crore with consolidated losses after tax and minority interest of Rs 15.1 crore. The company started its operations in 2007 and presently reaches to more than 10 million homes across India.

The company has incorporated and acquired around 62 MSO till date and has singed MoUs with around 27 more to acquire them going forward.

The company had raised another Rs 75 crore from EMSAF Mauritius, part of $10 billion Emerging Markets Management LLC, in July this year. The firm sold a 3.53% stake to EMSAF, which values the firm at more than Rs 2,100 crore. IIML, which has invested through Standard Chartered IL&FS Asia Growth Fund and TARA India Fund, will hold around a 10% stake post issue.

STAR Group and DEN entered into a 50:50 joint venture in early 2008. This venture acts as a content aggregator and has exclusive rights to distribute 23 channels. STAR has the right to increase its stake in joint venture.

While several companies in this segment have raised private equity funding, DEN will be the first to go for a listing. Some other cable operators who have raised funding include Hathway Cable (part of the Rajan Raheja group), which raised $60 million from ChrysCapital by selling a 12% stake.

Last year New Silk Route picked up a 23% stake for Rs 60 crore in Ortel Communications, in which Actis also holds a stake.

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