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Tag: FIIs

  • News channel stock up on government ok for FII inflows

    News channel stock up on government ok for FII inflows

    MUMBAI: Media stocks showed varied movements on the stock market and rallied smartly after the government today announced FIIs, non-resident Indians and overseas corporate bodies will be allowed to invest in the print medium’s news category and TV news channels.

    One of the major gainers at the stock market was Deccan Chronicle that opened at Rs 185 on the Bombay Stock Exchange (BSE) to close at a high of Rs 212, gaining in the process Rs. 26.55.

    Yes Bank country head, entertainment and media, Sunil Kheterpal said, “The approval, which has been pending for a while, is a welcome step for both the print and electronic media (stocks).”

    Another market analyst stated, “The news about allowing FIIs, etc was doing the rounds and the market today reacted optimistically to the formal announcement.”

    Most of media stocks, except Zee Telefilms, registered varied degree of gains on the stock market today, buoyed by the government announcement after a Cabinet meeting.

    TV Today Network, which opened at Rs 79.25, closed for the day at Rs 88. NDTV opened at Rs 196.45 and closed the day at Rs 214. TV 18 opened at Rs 267.20 and closed for the day at Rs 278. Zee closed at Rs 142.30 after opening the day at Rs 146.

    Dwelling on the media stock rally a market analyst was of the opinion that NDTV, TV 18 and Deccan Chronical would be “on the radar of FIIs.”

    Mid-Day Multimedia, which had kicked up a political controversy when it went public few years back because of the possibility of FIIs investing in the stock and, thus, in an Indian newspaper, today opened at Rs 63 to close the day at Rs 70.                     
    While pointing out that FIIs would be “interested in media stocks, though being selective,” another stock market analyst opined Mid-day Multimedia is still grappling with competition and might be “one of the less likely contenders” (for FII investments).

    In this connection, market analysts feel that a possibility of the Indian Express group and Hindustan Times, which are also looking at going public, will bring good growth in the print media sector.

    The Union Cabinet today okayed investments in print’s news category by FIIs, OCBs and NRIs within the overall foreign investment cap of 26 for this sector.

    I&B minister Jaipal Reddy while making an announcement on allowing printing of facsimile editions of foreign newspapers in India ruled out any threat to the Indian newspapers.

    “There would be no threat to the invasion of news content of Indian newspapers because while facsimile editions of foreign papers have been allowed, these papers must be a standard publication in their own country as well, and their Indian editions will not be permitted,” the minister explained.

    Dwelling on the electronic media, Reddy reiterated that the ceiling on foreign investment of 26 per cent cap will hold, but, as hinted earlier, FIIs, OCB, NRIs, have been permitted to invest in news channels as well.

    Market analysts believe that the upturn in the media sector augurs well for investors. “There is scope to substantially increase FII investment in the broadcasting companies,” a fund manager in a leading broking house said.

  • GDR holding in Crest falls to 26 per cent

    GDR holding in Crest falls to 26 per cent

    MUMBAI: Crest Animation Studios has seen a change in its shareholding composition after it raised $5.8 million via global depository receipts (GDRs) early this year.

    The GDR holding in Crest has fallen from 42 per cent to 26.3 per cent as higher price in Indian markets provided arbitrage opportunities.

    The GDRs were issued at a conversion price of Rs 35 per share. Since then, the market has responded positively and Crest is currently quoting at around Rs 78 per share.

    By June, 2004, the GDR holding had fallen marginally to 39.35 per cent. While the foreign institutional investors (FIIs) held 6.57 per cent, mutual funds had 1.45 per cent. But with the stock price surging ahead, mutual funds have shown keen interest in the last two months. There has been an appreciation of over 60 per cent in the stock since 2 August when it was quoting at around Rs 48.75 levels.

    “The public holding has gone up. Indian mutual funds have increased their exposure,” says Crest vice-president of corporate strategy and finance Abhay Bhalerao.

    The promoters’ holding has gone down since the GDR issue from 32 per cent to 15.6 per cent in the company. However, their stake will go up by 5 per cent, as the warrants get converted in March, 2005.

    “The promoters had taken a substantial dilution as they wanted to raise funds to restructure their business and focus wholly on animation,” says Bhalerao.

    The proceeds of the GDR were entirely capitalised in the US subsidiary, RichCrest Animation, USA, for expanding operations and developing original animation content. The parent company in India, however, has received close to $5 million as outsourced orders from RichCrest since the GDR issue.

  • GoM to review print sector vis-a-vis FIIs

    GoM to review print sector vis-a-vis FIIs

    NEW DELHI: Giving away a fact that there must have been some internal differences on the matter, the Indian government, today said that a ministerial group will review the whole print medium sector vis-?-vis foreign investments (FII).

    “A group of ministers (GoM) would review the entire print medium sector vis-a-vis publications of foreign journals and newspapers in India and the foreign investment allowed at present,” information and broadcasting minister Jaipal Reddy today told journalists during a briefing of a Cabinet meeting. The I&B ministry had taken some media-related issues to the Union Cabinet, including amendments to an antiquated Press Registration Bureau Act, in the light of the fact that The International Herald Tribune has started publication from India in what the government feels is a breach of the letter and spirit of existing guidelines on the issue.

    Though Reddy made it clear that the proposed GoM is unlikely to have a say in foreign investment norms for the television sector, he did not rule out over turning of the previous government’s decision allowing up to 26 per cent foreign investment in the news category of the print medium and up to 74 per cent in the technical journal category.

    “How can I predict what view the GoM would take? One of the options could be to make the present guidelines (on foreign investment in print medium) more stringent,” he cautiously said.

    The changes in the foreign investment norms in the print medium was brought about in 2002, after hectic lobbying by a section of media companies, by the Bharatiya Janata Party-led National Democratic Alliance government. That there were some differences within the Union Cabinet on the issue of amendment in the PRB Act and the IHT case could be seen from the fact the compromise formula was the suggestion on formation of a GoM, rather than okay an I&B ministry proposal, envisaging a slew of changes.

    The GoM, which does not have any time frame for its recommendations at the moment, would look at the print medium sector, violations of guidelines occurring therein and what could be done keeping in mind the changing national and global scenario.

  • FII investments: I&B buys news channels’ line

    FII investments: I&B buys news channels’ line

    NEW DELHI: A ministerial note being given final touches at the information and broadcasting ministry may bring smiles on the faces of listed media companies running news channels as a contentious issue of investment by foreign financial institutions (FIIs) would get addressed. A relaxation in investment norms is in the offing, provided the new Cabinet okays it.

    But the same may not be true for the private FM radio companies as the information and broadcasting ministry feels that the players concerned have “complicated” the matters further by moving courts on the issue of annual licence fee, which became payable on 30 April.

    The I&B ministry’s note on FII investment in TV news channels would be put up before the new minister on a priority basis so that various concerns raised by the likes of Zee Telefilms and Television Eighteen Ltd and stumbling investment blocks related to the likes of NDTV Ltd and TV Today Network Ltd get addressed for the smooth functioning of the companies concerned even while conforming to the existing laws of the land.

    According to ministry sources, the issue of FII investment and whether it has to be treated as foreign investment or not is something that needs to be addressed quickly by the new government as the restructuring process of various companies running news channels depends on that.

    At present, the I&B ministry treats FII investment as foreign investment in TV news companies, which has been making life difficult for various news channels to adhere to the existing foreign investment cap of 26 per cent andstill continue uplinking from India.

    The contention of the likes of Television Eighteen has been, ministry sources told indiantelevision.com today, that it is difficult to keep track of every FII investment (read buying of shares) in publicly traded media companies, though the Companies Act, which would otherwise over-ride any other guidelines, is more liberal in this regard as long as sectoral caps are adhered to.

    “We have sought information from the finance ministry on the FII investment angle and the issue is likely to be put up before the new minister as soon as possible,” a source in the I&B ministry said, pointing out that if the Companies Act does not treat FII investment as foreign investment in listed companies, then an amendment would be made in the uplinking laws of the country after Cabinet approval is obtained.

    But the sources, however, ruled out any immediate relaxation in the foreign investment cap of 26 per cent in TV news ventures, saying, “these things, if at all they happen, would take a longer period of time for the government to decide on.”

    CAS LIKELY TO BE DUMPED

    Another opinion that is firming up in the I&B ministry amongst bureaucrats is that the issue of conditional access system (CAS) should not be pursued by the new government.

    “Our advise to the new I&B minister would be to steer clear of issues like CAS that are simply nothing but a political minefield,” a senior government official said, adding that the effort would also be to “distance the I&B ministry as much as possible from CAS.”

    The feeling in the outgoing government towards the end was also that law should not have mandated CAS and the technology should have been allowed to be evolved naturally via market forces.

    Considering the stiff opposition to CAS in the two main states where CAS was being sought to be implemented — Union Territory of Delhi and West Bengal — government officials feel that the new government would prefer to steerclear of the CAS issue letting the regulator take an initial stand on the issue.

  • MBPL moves court to prevent stringent govt. action

    MBPL moves court to prevent stringent govt. action

    Zee, DTH licence, ASC Enterprises, Subhash Chandra, Siti Cable, Space TV, Dish TVNEW DELHI: Even as Music Broadcast Pvt. Ltd. (MBPL) moved the courts today as a pre-emptive measure against the Indian government taking any stringent action against it on Radio City, the Indian government said that it has received a lengthy reply on the FM radio channel and would study it in “due course.”

    The same way as Star News had gone to a Mumbai court seeking protection against any disruption of uplinking procedures, PK Mittal’s MBPL has sought legal protection from a Mumbai court against government encashing its bank guarantees — totalling over Rs 400 million in the third year of operation — without giving it time to explain things.

    MBPL is the licence holder for operating private FM radio stations in various cities and has a marketing and content supply agreement with DigiWave, said to a subsidiary of Star India Pvt. Ltd.

    However, government officials pointed out that MBPL’s request for a meeting before a final decision is taken on the matter would be acceded to.

    In its latest reply to the information and broadcasting (I&B) ministry queries on MBPL being just a proxy company for DigiWave, the Mittal company has said that it doesn’t have access to statutory information or authority on DigiWave.

    The Mittal company has also stated that “adverse report” on MBPL and Radio City is impacting the company’s revenues and the moral of the employees.

    When contacted by indiantelevision.com a senior executive of DigiWave-MBPL combine said, “The government’s queries are fine, but what is affecting us is the trial by the media as it’s affecting moral of the employees that is really down.”

    On a query on MBPL being a proxy company for Star, the former has said that such “outsourcing” is a normal practice globally.

    On another query raised by the government on the debt equity ratio being skewed and too high, MBPL, while denying this, has explained that such things are “common practice in greenfield ventures.” The government had pointed out that the debt equity ratio of MBPL is 5800:1.

    A senior government official today said that the I&B ministry would take some days to take a view on the replies furnished by MBPL.

    The information & broadcasting ministry on 12 August had asked MBPL to explain its relationship with the Star India subsidiary DigiWave and how and why the relationship should not be deemed to be flouting the foreign equity restrictions in the FM radio sector.

    As per current records, content, ad sales and marketing support for Radio City is Star India’s responsibility. The PK Mittal-promoted MBPL is the licence holder while the operational part is with Digiwave, a 50:50 JV between Star and the Ispat group.

    According to the Reserve Bank of India (RBI) guidelines only portfolio investments by foreign institutional investors (FIIs) are allowed in the FM radio sector.

    The government had further stated that as per Clause 13 of the FM radio licence agreement, a licencee (MBPL) cannot transfer the licence and is responsible for generating the content. If it comes to light that this is not happening the licensor (the government) has the right to cancel the licence.

    The government missive to Star also points out that the paid up capital of MBPL being very low, it is rather curious how the operational costs of running an FM channel the size of Radio City is being managed.

    The government has also said that since Digiwave has given a loan of Rs 580 million to MBPL, it appears that DigiWave is the company that is solely responsible for running Radio City.

    In the light of all this MBPL had been asked to furnish details on which an opinion would be sought from the law ministry and the Department of Company Affairs (DCA) to examine whether the guidelines are being contravened or not.

  • Essel shells out shares to FII to bail Zee, EPL

    NEW DELHI: The promoters of Essel Group have placed 12,375,000 shares (three per cent of the equity share capital) of Zee Telefilms Limited (Zee) out of their personal holding with foreign institutional investors (FIIs). These proceeds will be used to pay dues to both Zee and Essel Propack Limited (EPL). This amount will clear the dues from the promoters to both the companies.
    Enam Securities did this placement, pursuant to a mandate given to them a week ago.
    The institutional investors who have purchased these 12.37 million shares are well known international investors keen on Indian media and entertainment stocks with a long-term perspective, says a statement from Zee today.
    Essel group of companies chairman Subhash Chandra, as quoted in the statement, said: “Zee Telefilms Limited is going to receive the entire remaining dues. ” He adds, “In my interaction with shareholders, I had made a commitment of repaying the dues of Buddha Films Pvt. Limited (BFPL) at the earliest.”
    The only dues outstanding from promoters to Zee were advances outstanding from BFPL.
    Though these were business losses of Zee on account of marketing of cricket rights, the promoters of Essel Group had taken it on their own books. With this placement, the outstanding of promoters towards Zee would be paid off.
    “We are happy to have as our shareholders institutional investors who have a long-term perspective about the company’s future prospect and growth”, according to Chandra, who added, “Essel Group has also taken a conscious decision to concentrate on media, entertainment and information led businesses.
    “Placement of these shares re-establishes that the promoters of Essel Group will always stand by their commitment towards delivering real, sustainable shareholder value, the statement said.

    Also read:

    Zee seeks to clean convergence adventure from balance sheet

  • Zee stocks stumble after heavy selling by FIIs

    Zee stocks stumble after heavy selling by FIIs

    Wednesday was not a good day for Zee Telefilms stocks. This inspite of the fact that the net profit of the company went up by 160%. Zee stocks hit the circuit of 12% at both BSE and NSE.’

    Zee stocks fell by Rs 85 to Rs 621 on the BSE. Rumor has it that the India’s petroleum baron who owns one of the largest companies has waged a war against the New Economy stocks. It is said that Satyam and Infosys shares will also witness the same fate in the coming days.

    Zee has already downsized its ADR issue. In fact it will be going in for private placements to the tune of $200 million in contrast to the initial ADR of $1.5 billion.

    The fall in Zee prices had an adverse effect on the whole of BSE which fell by over 120 points or 2.62%.

  • Balaji promoters offload 10% equity to FIIs

    Balaji promoters offload 10% equity to FIIs

    The promoters of hit soap factory Balaji Telefilms, Jeetendra Kapoor and his family members, have offloaded 10.11 per cent of their equity to a group of foreign institutional investors, bringing down their stake in the company to 57.80 per cent, the company has confirmed.

    Balaji Telefilms company secretary Ajay Patadia confirmed the stake sale but would not reveal the price paid per share in the offload. The only confirmation on this is that it is over Rs 600 per share.

    A Reuters report, quoting market sources, said US-based Capital International was one of the buyers. Reuters also quoted Patadia as saying Singapore-based Alliance Capital was among the funds which have a big exposure to the company.

    Meanwhile CNBC India, quoted Balaji chairman Jeetendra Kapoor as saying there would be no more divestment for the near term at least.