Balaji Telefilms to raise $22M for digital content unit

Balaji Telefilms Ltd said on Friday it will raise Rs 150 crore ($22 million) by issuing preference shares to global investors to launch and expand its digital media unit.

The company will issue 1.07 crore shares at Rs 140 each to Atyant Capital India Fund – I, Vanderbilt University, GHI LTP Ltd, GHI HSP Ltd and GHI ERP Ltd, it said in a stock-exchange filing.

The company's digital content business is housed under ALT Digital Media Entertainment Ltd. The unit will operate an over-the-top (OTT) platform that will offer subscription-based video on-demand services. It was floated in August 2015 with an aim to churn out original shows for web and mobile users.

Balaji, which produces television shows and movies, is among a host of companies that are launching OTT video platforms to tap into rising demand in a country where more people than ever before are buying smartphones and accessing the internet. Netflix, Star India's Hotstar, Sony Liv, Zee group's Ditto TV are among the other companies that have OTT video offerings in India.

Netflix Inc, the world's largest independent video streaming company, launched its service in India last month as part of a wider international expansion. Viacom18 Digital Ventures, the digital arm of Viacom18 – a joint venture between Viacom Inc and Mukesh Ambani-controlled Network18 Media & Investments Ltd, has named its online video streaming platform Voot.

Balaji said ALT Digital will create differentiated, original digital content for mobile devices, web, smart TVs and game stations. The digital content business will be the next growth driver for the company, it added.

Balaji has hired executives from Sony and Viacom18 to lead its digital content unit. In December, it appointed former Sony Entertainment Television executive Nachiket Pantvaidya as the CEO of ALT Digital. Last month, it named Ekalavya Bhattacharya, who was earlier with Viacom18, the unit's chief strategy officer.

The company said the stake of its promoters will fall to 40.6 per cent after the share issue. The promoters held 47.29 per cent of the company at the end of December, according to stock-exchange data.

Shares of the company were 3 per cent lower in afternoon trading at Rs 108.30 in a Mumbai market that was up 0.7 per cent.