DEN, Jasper switch off TV shop for Rs 10 lakh
Joint venture sells entire stake in TV merchandise channel Macro Commerce to Pimex Broadcast.
In a filing submitted to the BSE on Monday, DEN Networks said the two shareholders had entered into a share purchase agreement, to sell their entire stake to Pimex Broadcast for Rs 10 lakh, as the cable TV distribution company focuses on its core businesses of providing cable and wired broadband services.
"Pimex will take over all the existing liabilities and dues of Macro and together aspire to be one of the significant players in the TV shopping business," the BSE-listed company stated in its filing. "The name of DEN and Snapdeal will be dropped from the branding," the stock exchange filing stated. VCCircle was the first to report of the development.
The Rs 10-lakh sale price of the three-year-old joint venture is a significant drop in valuation for the two stakeholders, but more so for Delhi-based DEN Networks.
In September 2015, the company, which has a current market capitalisation of Rs 1,634.67 crore Rs 6 crore, to increase, said it had paid its ownership in the joint venture to 82.87%, through a mix of subscribing to new shares via a rights issue and purchasing stock from Jasper Infotech.
Macro Commerce, which was originally set up as a 50:50 joint venture between Jasper Infotech and DEN Networks in 2014, was seen as an avenue for the SoftBank-backed online marketplace to increase its presence across channels.
The DEN Snapdeal TV-Shop home shopping channel, which competed with the likes of Naaptol, HomeShop18 and StarCJ, was set up as a part of Snapdeal's plans to ramp up its omni-channel play, especially in the tierII and tier-III cities and beyond, especially in areas where internet penetration was low.
However, Mitsui-backed Naaptol is regarded as the strongest player in the segment, claiming to reach about 160 million TV households in India on a daily basis, while processing about 20,000 orders a day, offers goods and services across multiple channels, including, print, television, web, mobile and direct marketing.
According to the stock exchange filing, Macro Commerce posted a turnover of Rs 28 crore for the financial year 2015-16. For the previous 12-month period, it had recorded a turnover of Rs 3.17 crore.
The development also comes at a time when Snapdeal is in the process of being sold to rival ecommerce company Flipkart, for an anticipated $700 million-$1 billion, steep plunge from its peak valuation of $6.5 billion.
Bengaluru-headquartered Flipkart, the country's largest online retailer, is currently undertaking its financial and commercial due diligence, which is expected to take four to six weeks.