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Jagran Prakashan to consider IPO of radio biz after rollout of 11 stations
MUMBAI: Print major Jagran Prakashan Ltd (JPL), which acquired Radio City, will consider a public float of its radio business after rolling out 11 new stations as part of its Phase III expansion programme.
JPL is reluctant to take the private equity route to raise capital for its radio business, a senior executive of the company said.
The focus now is to set up the new stations. “We made significant investments to acquire new frequencies. Our task now is to operationalise the new stations. After that, we will consider doing an IPO [initial public offering]. Some private equity investors have shown interest to acquire stake, but we have not preferred taking that route,” Jagran Prakashan chief financial officer RK Agarwal told TelevisionPost.com.
JPL acquired Music Broadcast Pvt Ltd (MBPL) in late 2014 for Rs 434 crore (Rs 4.34 billion). MBPL, which then operated 20 radio stations under the brand name Radio City 91.1 FM, had presence in West and South India.
Radio City and Radio Mantra are in the process of integrating their businesses. Radio Mantra’s holding company Shri Puran Multimedia Ltd (SPML) is privately held by the promoters of JPL. Radio Mantra has presence in eight stations, including Jalandhar, Agra, Bareilly, Gorakhpur, Hisar, Karnal, Ranchi and Varanasi.
“The rollout of the new stations will start in May, depending on tower availability. The integration process between Radio City and Radio Mantra has already begun. We are awaiting clearances from the government. The approvals are expected to take 2–3 months,” Agarwal said.
MBPL acquired 11 frequencies in the first batch of FM Phase III auctions with an investment of Rs 62.5 crore (Rs 625 million). This took Jagran Prakashan’s total frequency count to 39 stations (including Radio City and Radio Mantra).
For the nine-month period ended 31 December 2015, Jagran’s radio business reported operating revenue of Rs 167.72 crore (Rs 1.68 billion). The net profit for the period stood at Rs 25.99 crore (Rs 259.9 million).
The share of radio in the overall media and entertainment sector remains around 4% of the total advertising market size. According to the recent FICCI – KPMG report on the media and entertainment industry, the radio industry grew by an estimated 15.1% in 2015 to reach revenue of Rs 19.8 billion. The growth came from an increase in ad rates and volume enchantment in Tier II and III cities.