Acuite revises credit ratings of Dish Tv after considering financial risks

5 Jan 2022 , 10:15 AM

Acuite Ratings & Research Limited has considered the consolidated business and financial risk profile of Dish TV Limited, and based on the said review, Acuité vide its communication dated January 3, 2022, has revised the credit ratings of the company.

The Bank Loan Ratings Rs450cr of the company has been downgraded to ACUITE BB from ACUITE BB+ with Rating Watch with Negative Implication.

The rating on Commercial Paper (CP) Rs50cr has been reaffirmed at ACUITE A4+ and Withdrawn.

“Acuite has considered the decline in the business performance of DTIL Group, lack of clarity on change in management and contingency of disputed liabilities materialising. The operating income of the Group declined by 8.63% in FY21 to Rs.3249.36 Cr as against Rs3556.34cr in FY20. Dish TV’s market share declined to 23.45 percent in June, 2021 from 29.49 percent in March, 2020.

Further, the contingency of change in management of DTIL as proposed by Yes Bank Limited and materialising of its disputed liabilities regarding license fees and interest thereon impinge a negative bias to the rating,” company shared Acuite’s rating rationale.

DTIL in December, 2020 had received a demand notice of Rs4164.05cr from Ministry of Information and Broadcasting for the disputed license fee and interest on the entity. Although, Dish TV India Limited has already made provisions for this event to the tune of Rs3740.17cr as on March 31, 2021 which includes the interest as well. The matter is sub judice and pending before the Honourable High Court of Jammu and Kashmir.

Acuité is in discussion with the management of DTIL to understand the current status of the matters and will resolve the watch post clarification regarding the same. Acuité will be closely monitoring the developments with respect to the aforementioned matters and will resolve the watch once clarity emerges.

At around 10.18 am, Dish TV India Ltd was trading at Rs18.10 per piece up by Rs0.25 or 1.4% from its previous closing of Rs17.85 per piece on the BSE.