Videocon d2h on Tuesday became the first and only Indian satellite television company to list on a US stock exchange. The listing is also the first after the government liberalised overseas listing in December 2013.
The ADS will be listed on the Nasdaq index. The ADS was quoting at $11.16 per share at the time of going to print. The company achieved a market capitalisation of nearly $1.2 billion – the largest by an Indian company on an American stock exchange. The company had priced its ADS at $10 per share.
The company raised $325 million by issuing American Depository Shares (ADS) to Silver Eagle Acquisition Corp in January this year. US-based Silver Eagle had acquired 33.5% stake in the company.
Venugopal Dhoot, MD, Videocon Industries said the company received the approval within two months from the US Securities and Exchange Commission (SEC). Dhoot explained that Videocon d2h entered into a transaction agreement with Silver Eagle by issuing new equity shares in exchange for cash. The shares issued by Videocon will be distributed directly to Silver Eagle’s stockholders.
One Videocon d2h ADS represented four equity shares of the company. The company issued 15.09 crore shares to Silver Eagle, documents filed with the US SEC showed.
“The process is very smooth and robust, encouraging us to list our company in the US. The issue was oversubscribed and got very good response from some large funds,” Dhoot told FE in a telephonic interaction on Tuesday.
Dhoot said that India listing is kept on hold.
In December 2013, the government allowed Indian companies to list on international exchanges without the need to comply with disclosure norms of the primary (Indian) exchange. The window was opened for two years and companies only needed to take into account the corresponding rules of the foreign regulator and exchange concerned.
Domestic companies are allowed to list on only those exchanges that are compliant with the International Organization of Securities Commission and the Financial Action Task Force or those under foreign regulators that have entered into bilateral agreements with Sebi.
Earlier, a simultaneous listing on Indian exchanges was mandatory for overseas listing.
Videocon shares surged as much as 7% before ending the day at R155.75 per share, up R4.70 or 3.11%.
Deutsche Bank US was the sole financial advisor to the deal while Amarchand & Mangaldas and Suresh A. Shroff & Co offered legal and tax opinion to the company.