Media company Network18 Media and Investments Ltd, controlled by Reliance Industries Ltd, narrowed its loss to Rs.27.42 crore for the quarter-ended 30 September, benefiting from lower interest costs. The company posted a loss of Rs.36.46 crore in the same period last year. Revenue for the second quarter rose 8% to Rs.801.1 crore from Rs.744.8 crore.
Colors Infinity, an English GEC channel, was launched during the current quarter, and incurred a loss of Rs.19 crore.
In H1 FY16, there was loss of Rs.19 crore on account of new ETV news channels; there was also a one-time expense of Rs.10 crore for rebranding ETV regional entertainment channels as Colors.
H1 FY15 profitability vis-à-vis H1 FY16 was significantly influenced by advertisement income on account of the General Elections and the Union Budget.
It is to be noted that today, the 30 plus channels that constitute the TV18 network inform, entertain and engage with disparate audiences across genres and languages.
Moreover, according to the latest shareholding pattern, both the FIIs (from 8.84% to 8.88%) and DIIs (from 3.55% to 4.92%) have increased their stake in the company. Rekha Rakesh Jhunjhunwala holds 2.32%, while Reliance Capital Ltd holds 1.21% of the shares of the company.
What must have attracted Rakesh Jhunjhunwala to invest in TV18 Broadcast is probably the following:
(i) Liberalized foreign investment (FDI) norms for the broadcasting sector pursuant to which the foreign investment limit has been raised from 49% to 74% in teleports (setting up up-linking HUBs/teleports), Direct to Home (DTH), Cable Networks (Multi-System-Operators operating at National or State or District level and undertaking upgradation of networks towards digitalization and addressability). Foreign investment up to 74% in mobile TV is also permissible;
(ii) Digitization of cable TV will benefit the broadcasters by boosting subscription revenues...
(iii) Reasonable valuations: A market cap of Rs.5000+ crores for a dominant player is not that exorbitant.
Meanwhile, BCG-CII report says India's media & entertainment sector is likely to expand nearly 6-fold in near future, with vast demand, growing market and tech boom...