Tata Play Becomes The First Company To Secretly File A Draft Paper For IPO

Tata Group's company Tata Play has become the first company in the country to secretly submit documents to SEBI for bringing IPO. Tata Group submitted the document to SEBI, BSE, and NSE on November 29, 2022. Recently, SEBI has implemented the rule of pre-filing draft paper (Draft Red Herring Prospectus) confidentially for IPO.

Under confidential filing, the company bringing the IPO with SEBI is allowed to file the draft paper till the date of IPO launching is near, along with filing the registration in a private manner. Under this rule, companies are helped to keep the draft paper secret. SEBI and the Exchange can see the offer documents but no one else can see them. The company will have to file an updated draft paper after SEBI issues its response and when the company makes up its mind to launch the IPO.

What will be the size of the IPO?
Tata Play (formerly Tata Sky), a Tata group company providing direct-to-home (D2H) service, can raise Rs 2000 to 2500 crore through IPO. In fact, many investors including Disney want to sell their stake in Tata Sky. Tata Play has finalized five investment banks which include Kotak Mahindra Capital, Bank of America, Citi, Morgan Stanley, and IIFL.

41.49% stake in Tata Sons
Tata Sky began operations in 2004 as an 80:20 joint venture between Tata Sons and Network Digital Distribution Services FZ-LLC (NDDS). NDDS is part of Rupert Murdoch's company 21 Century Fox. Disney acquired Fox in 2019 after which Disney holds another 9.8 percent stake in Tata Sky through TS Investments Limited, while Tata Sons holds a 41.49 percent stake in the company.

Tata's IPO after 18 years!
After 2004, the IPO of any company has not come from the Tata group. About 18 years ago in 2004, the IPO of the country's largest IT company Tata Consultancy Services (TCS) came. TCS raised Rs 5500 crore through IPO. Now it is the turn of Tata Play to bring IPO.