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NDTV weighs demerger of NDTV Convergence

MUMBAI: Dr Prannoy-Roy promoted New Delhi Television Ltd (NDTV) is considering demerger of NDTV Convergence Ltd, a move that could unlock value for shareholders.

“Various proposals are being weighed. One of them is demerging the company’s convergence business. The sum of the parts will be greater than the whole,” a source in the company said.

NDTV’s convergence business clocked revenue of Rs 72 crore (Rs 720 million) in FY14 while EBITDA stood at Rs 4.5 crore (Rs 45 million).

NDTV Convergence is targeting Rs 100 crore (Rs 1 billion) as revenue this fiscal.

NDTV convergence CAGR

One possibility being weighed is raising capital through private placement. Another option is to list NDTV Convergence after hiving it off and scaling it up,  the source added.

NDTV Convergence, which houses all the digital businesses of NDTV, has shown robust growth over the years. It turned EBITDA positive in FY10–11 and has grown ever since.

It may be recalled that the board of NDTV has mandated the management to explore means of unlocking sum of parts of shareholder value through various methods including restructuring or private placement in NDTV Convergence Ltd and/or other subsidiaries.

NDTV convergence EBITDA

NDTV’s direct holding in NDTV Convergence currently stands at 17 per cent, while NDTV Networks, an NDTV subsidiary, owns 75 per cent stake in the company. The remaining 8 per cent is owned by others.

NDTV structure

Interestingly, NDTV Convergence also holds 39.07 per cent stake in NDTV Ethnic Retail Ltd, which owns www.indianroots.com—the e-retailing venture of the company. The company said that its revenues are up by 40 per cent on a quarter-on-quarter (Q-o-Q) basis.

NDTV Convergence claims to attract 40 million+ unique visitors every month and 5 billion+ page views per annum. So far, its app has been downloaded over 7.5 million times, while it streams over 2.4 billion minutes of premium videos per annum.

Incidentally, NDTV.com also recorded the highest ever internet traffic seen on any Indian website on a single day on 16 May 2014, with over 13 billion hits, 11.6 million unique visitors and 117.7 million page views across platforms.