India's fourth-largest DTH operator has listed its American Depository Receipts on the American exchange, totally worth around USD 325 million. Marking the start of trade of these securities, the opening bell on the Nasdaq was rung by Videocon's executive director Saurabh Pradipkumar Dhoot.
He was accompanied by Harry Sloan, the chairman and CEO of Silver Eagle, which picked up a 30 percent stake in Videocon D2H in January this year. This listing gives the company a market capitalisation of USD 1.15 billion.
Dhoot says the capital raised is more than enough to support its growth and capital expenditure plans for the next few years. He expects the company to be cash and PAT positive by the end of this year.
The company also expects to list on Indian bourses soon, but Dhoot does not have any time frame in mind.
Below is the verbatim transcript of Saurabh Dhoot's interview with Shereen Bhan on CNBC-TV18.
Q: Let me start by asking you when you see visibility as far as profitability is concerned for the business? It has been just over five years, it is a cash intensive business, and you continue to be in the growth phase, when do we actually see you turning in profits?
A: Well we have just raised USD 325 million. With that this balance sheet strengthens and we have more than enough capital to take care of growth prospects. We expect to reach fee cash flow positive this year actually and also we expect to reach profit after tax (PAT) positive by the end of this year.
Q: By the end of this year you hope to be cash positive. If you can also take us through your capex as well as your upgradation plan because I understand that part of these proceeds will be used to retire debt, if you can take us through the plans that you have for the money that you have raised?
A: Yes absolutely, so post the deal we have a net gearing and net debt of less than two times EBITDA which is very comfortable and because of our growth plans where we are adding close to more than 3 million subscribers a year, we have adequate funds to take care of our capex requirements for the next couple of years as well as we have already delevered our balance sheet by USD 100 million.
Q: You have listed on the NASDAQ. Let me ask you about your plans to list on the Indian bourses because I believe that you have sought a fresh nod from the market regulator SEBI, where do your plans for listing in India stand currently?
A: We are an Indian company with Indian customer base. Dual listing and listing in India makes a lot of sense for us as and as well for our visibility and for our investors and we would look at doing that as well. we don't have a time frame right now but we expect to do that soon as well too.
Q: Any broad idea of the timelines that we could expect?
A: We have just done the initial capital raise which has been substantial of USD 325 million and we would follow that up with an Indian listing as well. We would like to be listed in India as well as on NASDAQ but we don't have a timeframe right now to confirm.
Q: If you can take us through your growth plans as far as the subscriber addition is concerned. I understand that you have a current subscriber base of about 11.8 million, a market share of about 16.5 percent and also what your projection or your target is in terms of Average Revenue Per Unit (ARPU) because your ARPUs currently stand at 190 per subscriber and the industry ARPU is pegged at over Rs 280 per subscriber. So if you can give us some sense both on your expansion plans, your market share addition and ARPUs?
A: So, actually the ARPU you are referring to Rs 190 is actually an average accounting ARPU and the average you are referring to Rs 280 is actually the market paying ARPU which includes service tax and other aspects. So if you compare it with that then we have the same ARPU which is around Rs 280 as well and in terms of our market share – 11.8 was the earlier one, we have already crossed a gross subscriber base of 13 million in the last financial year and we believe we have been told by industry that we have an active paying market share of close to 18-20 percent.
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