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News channels feel the ad cap heat

MUMBAI: Television news companies were badly bruised on the bourses in the week ended 13 December even as the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) retreated from passing a verdict in the ad cap regulation case that limits commercial airtime to 12 minutes per clock hour.

The stock market has reacted negatively to the Supreme Court verdict which stated that the TDSAT does not have jurisdiction to pass judgments on orders given by TRAI. The Telecom Regulatory Authority of India’s (TRAI’s) ad cap regulation, thus, stands effective and broadcasters will now have to obtain a stay in the high court if they want no action to be taken against them for crossing the borderline.

If the ad cap is implemented, it will hurt broadcasters, particularly the news channels who have a very high exposure of advertising time per clock hour. With competition being so intense in the genre, upping advertising rates will be a tough challenge to offset the inventory loss due to the regulation.

News channels feel the ad cap heat

The market, perhaps, factored these implications when it punished the news broadcasting companies. All the news broadcasters—TV18 Broadcast, TV Today Network, NDTV and Zee Media—have taken a dip in their stock value.

TV18 Broadcast, which owns and operates CNN IBN, CNBC TV18, IBN 7 and Awaaz, was the worst loser in the week ended 13 December. Its share price declined 5.5% for the week to end at Rs 22.45.

Zee Media lost 4.9% to settle the week at Rs 13.35. The merger of the loss-making print business (DNA) is also not taken positively by the investing community.

NDTV, which is celebrating 25 years of its existence, continued to demonstrate a weak trend in its share price. The scrip lost 4.5% before rounding up the week at Rs 75.20. Extensive losses had crippled the counter to its monthly low of Rs 75 per share during the week.

TV Today Network also followed the slide. The company, which operates Hindi news channel Aaj Tak and English news channel Headlines Today, settled the week 2.53% lower at Rs 115.80 per share, not far from its weekly low.

ZEEL leads the entertainment broadcasters

Zee Entertainment Enterprises Ltd (ZEEL) took the lead by returning positive gains. In fact, the counter gyrated near its 52-week high of Rs 284.30 recorded last week. The counter ended the week at Rs 280.20 per share, up 2.9%.

Incidentally, ZEEL is among the top three leading entertainment broadcasters which have gone ahead to implement the ad cap guidelines. The other two are Star India and Viacom18.

TAM data infused fresh life into ZEEL’s showing. Its popular Hindi GEC channel, Zee TV, climbed to the second position as it raced ahead of Colors, according to TAM data (sourced from subscribers) released on Thursday.

Sun TV reversed the previous week’s trend for the worse. The dominant player in the South Indian television market lost 2.37% to end the week at Rs 363.80. Last week, the counter was sizzling due to a flurry of block deals.

Raj Television also struggled to keep its head above the water. The company gained 0.4% for the week to end at Rs 475.10 per share. In the previous week, it had settled into negative zone as profit-takers flocked the counter.

Tough going for the MSOs

Unable to collect money from the ground and pressured by the TRAI to comply with the digital addressable system (DAS) guidelines, multi-system operators (MSOs) have had a tough going.

Shares of DEN Networks, which have slumped over a period of time, bounced back to some extent. The scrip advanced 4.6% in the week before closing at Rs 135.00. Bottom fishing at the lower levels has helped the counter reverse declining trend.

On 5 December, DEN shares slid to a new 52-week low of Rs 110.45.

Many MSO companies had lost ground in the previous week as the deadline for customer application form (CAF) collection drew closer. Hathway Cable and Datacom and Siti Cable continued to fall.

Hathway Cable and Datacom lost 0.5% in the week to settle at Rs 245.80 per share. Siti Cable, on the other hand, ended 3% lower at Rs 16.35. This was a second consecutive week of losses for the company.

Dish TV stays flat

The ongoing spat between Dish TV and content aggregator IndiaCast UTV has generated interest among media watchers. Dish TV settled almost unchanged at Rs 60.70 per share.

Dish TV’s share price will depend a lot on how its content deal with IndiaCast UTV evolves.

Print media companies gain

Print media companies such as HT Media, Jagran Prakashan and DB Corp experienced a mixed trend on the bourses.

Jagran Prakash gained even as it filed for buyback of shares. The company is buying back 5 million shares at Rs 95 per share. It intends to spend Rs 475 million in the buyback offer.

Jagran’s share price advanced 2.94% for the week before ending at Rs 82.40. Its current market price is still 15% below the buyback price.

HT Media, the publishers of ‘Mint’ and the ‘Hindustan Times’, lost 5.6% for the week, before ending at Rs 76.60. In the previous week, the counter had slipped to its 52-week low of Rs 76.05.

DB Corp climbed to a weekly high, rejuvenated by the bargain hunting at lower levels. The counter had slipped to Rs 263.00 earlier during the week. It surged to Rs 278.00 on steady buying. Before ending at Rs 275.50 per share, the counter added 2.04% for the week.

No exciting show for other companies

Balaji Telefilms succumbed to profit taking this week. It ended Friday’s session at Rs 41.30 per share, down 4.07% for the week.

The company had made a strong comeback in the previous week by adding 10.9% to its share price.

Reliance Mediaworks also recorded an identical loss. The counter lost 3.9% before ending the week at Rs 49.05 per share.

Eros International Media, PVR, Reliance Broadcast Network and Prime Focus ended in negative territory.

Online media company Info Edge, radio broadcaster ENIL (Radio Mirchi) and Inox Leisure had a positive run-up.

CNX Media marginally up

The media and entertainment (M&E) sector ended the week on a flat note. CNX Media Index settled at 1,734.45, up 0.7%. It is mainly because of the strong showing from ZEEL, DEN Networks, DB Corp and Jagran Prakashan that the sector could post its third consecutive weekly gain.

For broader markets, the showing was poor. Leading indices ended the week lower, reversing the previous two weeks’ winning streak, as weak IIP data and high retail inflation number rekindled concerns about the health of the domestic economic.

The early signs of US tapering off also delivered a decisive blow to the market sentiment.

The BSE Sensex, which had scaled life high of 21,483.74 on Monday, finished the week 281 points or 1.34% lower at 20,716.

NSE Nifty finished 92 points, or 1.46% lower at 6,168.

With inflation remaining in an uncomfortable zone, market participants expect the Reserve Bank of India (RBI) to raise repo rate. Definitely, not a good signal for markets.

Rate-sensitive stocks from capital goods, automobile and banking sector suffered the most while IT and hotel stocks climbed anticipating further slide in Indian rupee. The rupee fell to 62.12 against the dollar, its two-week low.