Business Standard reports that Srini Raju's Peepul Capital is planning to sell 35% in Associated Broadcasting Company Private Limited (ABCL) that runs the TV9 regional channels.

However there’s a long background to this hot potato. ABCL has not being doing as well financially and Peepul has been trying to get other to share the risk.

Peepul Capital and its associate firm Chintalapati Holdings Pvt Ltd, together own 90.93% ABCL, while TV9 CEO Ravi Prakash and his associates own the rest.

Being a broadcasting case, any institutional investment in ABCL requires FIPB approval.

Last December, FIPB has rejected the proposal of ABCL, to dilute stake to SAIF Partners. SAIF was planning to buy around 14.5% stake in ABCL for Rs.51 Cr, valuing the company at around Rs.351 Cr.

ABCL has decided to file a revised proposal to get the FIPB approval. In its earlier application, it had sought merger of iVision Media India Pvt Ltd which is controlled by SAIF, with itself.

SAIF had invested in iVision Media India through CCPS in 2008. Later, ABCL took a Rs.51 Cr loan from iVision, with a condition to either pay back the amount to SAIF or part with equity.

Peepul Capital (erstwhile iLabs Venture Capital Fund) bought 80% in ABCL in 2004.

ABCL currently operates seven regional channels, two in Telugu, one in Kannada and one in English for Karnataka, and one each for Gujarat and Maharashtra. It is planning to launch three new channels in next one year, one for the Delhi NCR region, a Tamil channel and a Telugu entertainment channel.

It's sales in FY’10 was Rs.96.82 Cr with a net loss of Rs.2.61 Cr. In FY’09, it reported PAT of Rs.5.46 Cr on sales of Rs.74.53 Cr.

As per Credit Analysis and Research Limited (CARE), the Indian Media and Entertainment (M&E) industry size was Rs.58400 Cr in 2010, a growth of 12.4% over the previous year,. Over the next five years, the industry is projected to grow at a CAGR of 12.5% to reach the size of Rs.105,200 Cr by 2015. The television sector is estimated to have grown at a CAGR of around 13.8% over the period 2008 to 2010.

Recently, CARE had assigned CARE BBB- rating to company's long-term bank facilities of Rs.29.75 Cr. This amount has been reduced from Rs.40.37 Cr in 2008, when CARE had assigned BBB- to the company.

Last month, Asianet News Network Pvt Ltd acquired 51% stake in Kannada Prabha Publications Limited, to expand its footprint across television, internet and print. Multi Screen Media Pvt Ltd (MSM), which runs Sony Television in India, is planning to acquire Ramoji Rao-owned Eenadu TV's (ETV’s) bouquet of 11 regional channels, for around $500-600 Mn (Rs.2,250-2,400 Cr).

Peepul which was founded in 2000, currently manages a corpus of $700Mn and has investments in Metlife India Insurance Company, Aqua Designs India Private Ltd, TeleDNA Communications, UniverCell, Kam-Avida Enviro Engineers, among others. The fund invests between $15Mn to $25 Mn in each transaction.

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August 30, 2011 01:50 PM

i dont no - Posted by pavan Recommended by 0 Readers