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ZEEL to buy balance 49% stake in India Webportal for Rs 200 cr; invest in Tagos
MUMBAI: Subhash Chandra-led Zee Entertainment Enterprises Ltd (ZEEL) is on an acquisition spree. After snapping up the TV broadcasting business of Anil Ambani, ZEEL is expanding its digital business.
ZEEL has agreed to acquire the remaining 49% stake in India Webportal for $30.7 million (Rs 200 crore) to take full ownership of the digital asset. It is also acquiring a 12.5% stake in Bangalore-based Tagos Design Innovations, an in-video discovery platform, for $2.5 million (Rs 16.15 crore).
The stake buy in Tagos will help ZEEL scale up revenues of its over-the-top (OTT) business. Tagos’ flagship product is Charmboad, a platform that allows users to put a visual bookmark within videos, TV and movies.
ZEEL’s decision to completely own India Webportal contradicts its earlier decision to induct a strategic investor as an additional partner. ZEEL was willing to reduce its stake to below 51%.
Floated as a joint venture between ZEEL and US digital media publisher Penske Media Corporation in 2010, India Webportal operates websites such as India.com, Cricketcountry.com, Bollywoodlife.com, OnCars.in, BGR.in, Thehealthsite.com, Prepsure.com, Careerfundas.com, Travel.india.com and Video.india.com.
Penske owns 44% stake in India Webportal through MMC Investments Holding Company. The balance 5% stake is held by Ashok Kurien, a non-executive director at ZEEL.
In FY17, India Webportal reported a loss of Rs 13.8 crore compared to a profit of Rs 2.6 crore a year ago. Total income stood at Rs 64.7 crore, down from Rs 71.7 crore in FY16.
ZEEL said that India Webportal, which acts as its digital arm, has the potential to consolidate and scale-up the digital business.
In FY16, Tagos posted net loss of Rs 45.83 lakh on a revenue of Rs 12.54 lakh.
ZEEL expects both deals to be completed within 30 days.
Consolidating its digital business, ZEEL decided in March to acquire an 80% stake in tech startup Margo Networks for Rs 75 crore.
ZEEL’s OTT platforms comprise Ditto TV and OZEE. The Zee group also has news websites such as zeenews.com and dnaindia.com.
Zee group has also made acquisitions in its other company, Zee Media Corporation Ltd. The radio business of Ambani was acquired. Besides, in February 2016, ZMCL acquired an 80% stake in two India Today group companies, Today Merchandise and Today Retail Network, which run an e-commerce portal Bagittoday.com and plan to launch a television shopping channel.