Independent doubles interest in Jagran group
London, Jan 15 : In a sign of growing confidence in India`s booming media and entertainment industry, a leading British investor has doubled the value of its interest in the Hindi newspaper major, Jagran Prakashan. The Independent News and Media (INM), publisher of The Independent, picked up a 26 percent stake in the group, worth Euro 28 million, after the Indian government relaxed rules on foreign ownership in the media sector.
Announcing the price range for Jagran`s planned initial public offering (IPO) on the Mumbai Stock Exchange at the end of January, INM said the floated company would be worth between Euro 255 million and 306 million. This would value INM`s 26 percent stake at between Euro 53 million and 64 million, giving the company a potential return of 128 percent on its investment.
The Independent said that although INM did not plan to sell any shares at the time of the float, it said its stake in the new company would be diluted to 21 percent due to the issue of more than 10 million new shares.Jagran Prakashan publishes Dainik Jagran, India`s largest selling daily newspaper, from 28 printing centres across India.
The IPO - which is being managed by Merrill Lynch and ICICI Securities - is set to open for subscription between Jan 25 and 31. Jagran plans to use the proceeds from the float to expand the company and to boost working capital.
This is one of a series of foreign investors entering the growing Indian media and entertainment sector.
Efforts to liberalise overseas investment rules have attracted a raft of foreign players including Pearson, publisher of the Financial Times, Turner International and, most recently, BBC Worldwide.
The unit, the commercial arm of the BBC, became the first major overseas investor to take a stake in India`s commercial radio market when it set up a joint venture with Mid-Day Multimedia.
Early this month, BBC Worldwide, the broadcaster`s commercial arm, acquired FM radio licences covering seven of India`s biggest cities in the unit`s first move into overseas markets.
BBC and its local partner, Mid-Day Multimedia, won licences to operate FM radio services in Mumbai, New Delhi, Bangalore, Chennai, Kolkata, Ahmedabad and Pune.
The successful bids came just days after the BBC announced that it had bought a 20 percent stake in Radio Mid-Day West, a subsidiary of Mid-Day Multimedia, the Mumbai-listed media group.
Besides BBC Worldwide, a host of leading Indian media houses and international companies, including Britain`s Virgin Radio and the Malaysian pay-TV company Astro All Asia, are vying for licences as part of the government`s newly unveiled liberalised investment guidelines.
Virgin Radio has tied up with HT Music, part of the HT Media group that publishes the Hindustan Times, India`s second biggest selling daily, to enter the market.
Under the Indian government`s liberalised norms for ownership rules in the media industry, foreign investors can hold a maximum 20 percent stake in an FM radio station.