* - Both the long-term and short- term ratings reaffirmed as above have been placed under credit watch

in view of the banning of iron ore mining in the state of Karnataka by Honourable Supreme Court and its impact on JSW Steel Ltd. CARE will continue to monitor any developments in this regard in future and will take a further view on the ratings once the implications of these developments on the credit quality of the company are clear.

January 02, 2012 Mumbai

SUN DIRECT TV PRIVATE LIMITED

Rs.12.00 Billion Long-Term Loan CRISIL BBB/Stable (Reaffirmed)
* Interchangeable with cash credit/ overdraft facility to the extent of Rs.1.51 Billion

Sun TV CRISILs rating on the bank loan facilities of Sun Direct TV Pvt Ltd (Sun Direct) continues to reflect the strong financial support that Sun Direct receives from its promoters and the healthy growth in the companys revenues supported by steady additions to its subscriber base. These rating strengths are partially offset by Sun Directs sub-par financial risk profile, large initial establishment and operating expenses which are adversely affecting its profitability, and exposure to intense competition in Indias direct-to-home (DTH) television segment. Outlook: Stable CRISIL believes Sun Direct will achieve breakeven at the operating level in the near term, supported by strong growth in its revenues and by its gradually improving average revenue per user (ARPU). The companys promoters are expected to continue to provide timely support to fund business operations, continuing losses at the net level, as well as debt obligations. The rating outlook may be revised to Positive if there is better-thanexpected and sustained improvement in Sun Directs subscriber base and ARPU, or favourable regulatory changes, leading to more-than-expected cash flows. In addition, substantial equity infusion significantly benefitting the financial risk profile could also render a positive bias to the rating. Conversely, the rating outlook may be revised to Negative in case Sun Direct reports larger-than-expected losses, faces substantial delays in achieving breakeven, is exposed to adverse regulatory changes, or undertakes a large,debt-funded capital expenditure programme.

About the Company Sun Direct is a Chennai (Tamil Nadu)-based DTH operator, which began operations in December 2007. Currently, it is the second-largest DTH operator in India, with a subscriber base of about 7 million as on November 30, 2011. Mr. Kalanithi Maran and his wife, the promoters of Sun TV Ltd (owner of Indias leading television channels), hold 80 per cent stake in Sun Direct, while the rest is held by the foreign partner, South Asia Entertainment Holdings Ltd (Mauritius), an investment arm of All Asia Networks Plc, Malaysias leading cross-media group. For 2010-11 (refers to financial year, April 1 to March 31), Sun Direct reported a net loss of Rs.3.06 billion on net sales of Rs.6.21 billion, against a net loss of Rs.4.42 billion on net sales of Rs.6.42 billion for 200910.