Den Networks on Wednesday got a nod form the Ministry of Information and Broadcasting for the USD 110 million investment from Goldman Sachs. Goldman Sachs investment was awaiting multiple clearances and will now help the company clear its net debt, which stands at approximately Rs 200 crore, reports CNBC-Tv18’s Pragya Bhardwaj.
After the clearance, Den Networks will now be well funded sitting on a cash pile of approximately Rs 500 cr. This cash infusion is expected to help the company fund its digitization expansion and implement its broadband services.
Den Networks has also cut set-top box prices by up to 10 percent in four southern states, as reported by cogencies. It is a market which is not a major contributor to the company’s revenues.
The company is looking to cut set-top box prices in more states in coming months including the northern states which contribute a significant proportion to company’s revenues.
The move is in line with company strategy to expand its reach aggressively in smaller cities which will now undergo Digitization for Phase 3 and Phase 4. These Tier 3 and Tier 4 cities, with a population of less than 10 lakh citizens are more price sensitive compared to Tier I & Tier II cities, where digitization is already complete.
Although the overall quantum of price cut is not too substantial, it will be interesting to when the company announces further price cuts in key markets.
The stocks of the company were buzzing in Wednesday’s trade closing with gains of over 7.5 percent on very high volumes. Stock saw volumes of approx 8 lakh shares versus 10 day average of 2.4 lakh shares.