Tata Play IPO: Tata Play becomes first Indian co to make confidential pre-filing for IPO

Mumbai: Tata Play, formerly known as Tata Sky, has become the first company in the country to use the confidential pre-filing of documents option for its initial public offer (IPO) before the market regulator, Securities and Exchange Board of India (Sebi).

The Tata group firm filed documents with Sebi, Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) on November 29. The firm advertised the move in some leading daily newspapers on Thursday. ET in its November 11 edition was the first to report about this development.

The Tata Group direct-to-home (DTH) platform is looking to raise ₹2,000-2,500 crore ($300 million approximately), largely to give part-to-full exit to partners such as Walt Disney Company, which inherited its stake in the venture as part of its global buyout of Rupert Murdoch’s 21st Century Fox business, and Temasek, sources in the know said.

There will also be some primary capital garnering for growth, they added.

The salt-to-software conglomerate was waiting for the stock market regulator to issue guidelines on confidential IPO pre-filing – allowing pre-filing sans public announcement to help safeguard sensitive business information of issuers – after its board had given an in-principle approval about such a step in its September 30 board meeting.

Tata Play has already mandated five investment banks –

Capital, Bank of America, Citi, Morgan Stanley and IIFL – as lead arrangers and book runners in the proposed issue, the sources mentioned above said.

KEEPING A SECRET

As per the existing norms, for pre-filing of IPOs, companies need to make a public announcement that they have pre-filed offer documents with Sebi and exchanges. The issuer company also has to clarify that pre-filing doesn’t necessarily mean it will hold an IPO. A confidential filing, as the moniker suggests, allows a company to privately file a registration statement for an IPO with the regulator for review, delaying the public filing until much closer to the actual IPO date.

Opting to file confidentially – and under the radar – also helps a company to choose to go public at a time when both the company is primed and the market is most supportive. Since there is no public knowledge of the filing, there will be no questions asked, no media or investor scrutiny, and no rush to commit to a date.

Later, if the company indeed chooses to proceed with the offer, it can update its financials, Sebi’s observations and put it out in public domain.