Apollo Management earns new feats in India

In accordance with the latest information, noted leverage buyout specialist Apollo Management has picked 11% stake in Dish TV, the largest direct-to-home (DTH) operator in the realm of India, for $100 million (Rs 465 crore). This has taken place through global depository receipts (GDR) and the deal appraises Dish TV at Rs 4,603 crore ($990 million).

It has also been found that the funds are expected to be used to develop operations and for customer acquisitions. It is to be noted that DTH companies incur costs in order to add new subscribers to their fold for the reason that they subsidize the cost of equipment that is sold to every subscriber (below cost). DTH operators incur this initial cost to get hold of new subscribers in the hope that, over a period of time, the consumer will bring cash through payment of subscription fees.

The deal has been attained at a price of Rs 39.8/share against the closing price of Dish TV at Rs 40.75 on the NSE on Monday. Reports depict that the share price has risen over three times after hitting an all-time low of Rs 11.75 in October 2008. With the equity dilution, the total promoter holding in Dish TV will come down to 64.8% from 72.8% as of September end.

New York-based Apollo Management, known for having assets exceeding $50 billion under management, had last year initiated an India office and had brought in Mintoo Bhandari (a partner at the UK unit) to head the operations. Real estate investment arm of the company, Apollo Real Estate Advisors, already runs a $650-million real estate private equity fund in India in partnership with Delhi-based Khemka family’s SUN group.

Apollo Management L.P. happens to be a private equity investment firm, founded in 1990 by former Drexel Burnham Lambert banker, Leon Black. The firm has specialization in leveraged buyout transactions and purchases of distressed securities involving corporate restructuring, special situations and industry consolidations.