Mumbai: The shares of two companies in Subhash Chandra’s sprawling media empire grabbed investor attention on Wednesday.

Shares of Wire and Wireless (India) Ltd and Dish TV India Ltd, the two cable television distribution firms of Chandra’s Essel group, rose sharply in an otherwise lacklustre market, on speculation that the media maven is bringing in a foreign investor.

Wire and Wireless, or WWIL, shares leapt 77.43% to end Wednesday at Rs17.14, while Dish TV gained 20.40% to Rs23.90. The prices have fallen considerably from WWIL’s year ago high of Rs56.85 on 7 February 2008 and Dish TV’s Rs74.80 on 19 February 2008.

Traders are betting on WWIL as the probable contender to get an investor on board. They also said some high-networth proprietory investors could already have picked up WWIL shares from the market.

Dish TV shares must have risen mainly in line with the flare up of WWIL share prices, according to some analysts tracking the stocks.

“We would not like to comment on this,” said R. Nand Kumar, president, corporate communications, Essel Group, when asked about the sudden burst of activity in WWIL shares.

“I can say there is no proposal as of now,” said another senior executive at Essel Group who didn’t want to be named.

On the Bombay Stock Exchange (BSE), seven bulk deals in WWIL were reported after trading hours, with several brokerage firms including Prabhudas Lilladher , Ambit Capital, HJ Securities buying the stock. There were 15 bulk deals in WWIL on the National Stock Exchange (NSE).

Most of these deals by domestic brokerages were made at Rs15-16 per share.

An analyst with a domestic brokerage, who did not want to be quoted because he is not authorized to speak to the media, said: “Nothing has changed (in WWIL) on the fundamental side.”

The frenetic activity in the bourses could have sparked by the talk of a foreign partner being inducted in the company, but added that the activity could also have been because of the Foreign Investment Promotion Board (FIPB) considering a proposal to allow foreign partners and investors to hold up to 74% in television cable distribution business. The existing limit is 49%.

WWIL has enough headroom to accommodate foreign investment as the foreign holding in it is only 11%, the analyst added.

In a 21 January analyst conference held immediately after the third quarter results were announced, Chandra, chairman of the two television cable distribution companies, said: “Though I sit on both companies of (direct-to-home) DTH (Dish TV) as well as cable (WWIL), but I do always say that cable will have a better chance of giving value-added services than DTH because it can have the reverse path or reverse loop closed through the cable itself with the consumer.”

Interestingly, the company is awaiting approval from capital markets regulator Securities and Exchange Board of India (Sebi) to raise Rs450 crore through a rights issue to shareholders.

“WWIL is in the process of finalizing a rights issue to the tune of Rs4.5 billion. We have assumed the rights issue price at Rs10, resulting in equity dilution of 450 million shares.

The funds raised through this issue will be used to invest in the HITS (Headend In The Sky) platform and retire debt,” Ambit Capital said in a research report late December.

WWIL reported total operating revenues of Rs81.79 crore, a 16.2% growth over the corresponding year-ago quarter. It made an operating profit of Rs77 lakh but was still steeped in losses of Rs152 crore in fiscal 2008.

Essel group promoters late last year had come up with a rights issue for Dish TV to raise Rs1,140 crore. The promoters had to fund almost 98% of rights issue, as other shareholders contributed only 2% of the issue because Dish TV’s share price was quoting less than the rights issue offer price of Rs22 per share. The application money was to be made in three instalments.

The same analyst mentioned earlier said Dish TV’s rights issue had to be finally rescued by the Essel group promoters. The promoters subscribed to 98% of the rights issue to avoid a devolvement. As a result, their stake in Dish TV rose to 80% from 52% earlier.

WWIL has about 7 million subscribers and is changing its strategy to take on DTH operators, including Dish TV, by altering its profile from a business-to-business proposition to a business-to-consumer model. This was confirmed by Chandra in the analyst meet.