The MSO got a boost in the markets when Reliance Industries Limited (RIL) invested nearly Rs. 2,700 crore in it and acquired a controlling stake (78.62%) in the company. RIL’s equity infusion of Rs. 2,045 crore led to significant improvement in DEN’s capitalisation and coverage indicators as on March 31, 2019, and significant unencumbered cash balances.
ICRA, for fund based- Term Loans, revised credit ratings to AA-(Stable); fund based- Working Capital Facilities credit ratings has been revised to AA-(Stable); Non- fund Based- Working Capital Facilities revised credit rating is A1+ and unallocated limits has been upgraded to AA-(Stable)/A1+.
The rating agency hopes DEN’s focus to be on broadband expansion under the tutelage of Reliance Jio and receive need-based technical and operational support from the latter.
As per ICRA, the MSO witnessed decline in operating performance during FY19 over the previous fiscal, however, favourable regulatory change in the cable TV industry are expected to drive performance over the medium term.
RIL will be able to launch its ambitious fibre-to-the-home (FTTH) with the help of this big ticket purchase and it gave RIL’s expansion strategy a significant boost with instant access to DEN’s 8-million plus digital subscribers1 and its established local cable operator (LCO) network for last-mile connectivity.