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Tag: SAIF

  • ‘The news terminal biz is dominated by global players and we got a good price for NewsWire18’ : Network18 head of investments Sarbvir Singh

    ‘The news terminal biz is dominated by global players and we got a good price for NewsWire18’ : Network18 head of investments Sarbvir Singh

    Founder-promoter Raghav Bahl has started shaving Network18 Group‘s non-core businesses to stay focussed on the company‘s core strengths of television, digital assets and e-commerce.

     

    As part of the haircut, Bahl has found a buyer for NewsWire18, the home-grown real-time financial news and information provider, which competes in India with global giants like Bloomberg and Reuters.

     

    Private equity firm Samara Capital is buying Network18’s 77.50 per cent stake in NewsWire18 for Rs 900 million and has drawn up plans to expand the company‘s business, including an ambitious plan to spread out to other countries.

     

    For Network18, it is a profitable monetisation of its stake in the company it helped grow and stabilise since 2006. NewsWire made an operational profit of Rs 70 million on revenue of Rs 445 million for the fiscal ended 31 March 2012.

     

    Network18 has so far raised Rs 2 billion from stake sales in non-core businesses this year and expects to raise another Rs 3 billion over the next 12 months.

     

    It is also in discussions with new as well as existing investors (SAIF Partners and GS Shopping) to invest in its teleshopping and e-commerce arm HomeShop18 as it needs capital to grow. It intends to continue to hold a sizeable
    stake in HomeShop18, though not a controlling one.

     

    The other companies which Network18 will ultimately exit are travel portal yatra.com and Infomedia’s printing business.

     

    In an interview with Indiantelevision.com‘s Sibabrata Das, Network18 head of investments Sarbvir Singh talks about the Group‘s focus on profitability, cautious approach towards big-budgeted television channel launches, and strong digital and e-commerce assets.

     

    Excerpts:

    Q. Why is Network18 exiting from NewsWiire18 when it had turned into an operating profitable company?
    The news terminal business is dominated by global players (like Reuters and Bloomberg) and doesn’t fit into our scheme of things. We are getting a good price (Rs 900 million) for selling our stake (77.5 per cent) in NewsWire18.

     

    Q. Why didn’t the deal with Reuters consummate? Was it because it made sense for Reuters to have Network18 as an equity partner so that NewsWire18 would continue to benefit from the television news channels of the Group?
    I can’t comment on who the other interested parties were, but that (total exit) wasn’t an issue at all. We obviously sold to private equity firm Samara Capital because we got the best deal from them.

     

    Q. Wasn’t there a synergistic value as Network18 Group holds interests in television news channels?
    The news terminal business does not fall into our core focus areas; it also does not fit into our core business strength. It is a standalone business by itself and requires specific focus.

     

    We have decided to get out of our non core businesses. Our focus will be on three core areas: television, digital and e-commerce.

     

    Network18 is no longer the same company as it was in 2007. Our television business has grown exponentially, be it in the areas of news or entertainment. We have strong web properties and our e-commerce play is large.

     

    Q. Does this mean that the Group will launch more television channels through TV18?
    We may launch smaller channels, but there is no rush as such. We have too much on our plate. In addition to the existing channels, we have made a big acquisition (Rs 21 billion for acquiring assets of ETV Network) and will have to integrate operations.

     

    ‘Our focus will be on three core areas: TV, digital and e-commerce. Network18 is no longer the same company as it was in 2007. Our TV has grown exponentially. We have strong web properties and our e-commerce play is large‘
     

    Q. Is there a plan to revive the launch of a Hindi movie channel?
    We are not sure whether we would need a Hindi movie channel at this stage. The Hindi general entertainment channels have become like movie channels on weekends.

     

    Our focus will be on profitability and getting the distribution equation right. Distribution is a very important part of the evolution process and we have to set it right. We are unlikely to do big channel launches at this stage.

     

    Q. Sources say there is plan to launch a Gujarati business news channel along the lines of CNBC TV18. How far has this progressed?
    In media companies a lot takes shape at the planning stage. Everybody looks at opportunities. But as I said earlier, we are in no tearing hurry to do anything.

     

    Q. What are the other non-core businesses that Network18 is looking to sell?
    We are looking at getting about Rs 5 billion from our asset sales. We have already done Rs 2 billion this year and expect to generate another Rs 3 billion over the next 12 months.

     

    Q. Network18 has sold partial stake in bookmyshow.com. Will it exit from this as well?
    We will hold on to our remaining stake in bookmyshow.com and build that business. We want to be in digital commerce. We see ourselves as being one of the largest players in e-commerce through our presence in online and television through HomeShop18.

     

    Q. Which means the stake in HomeShop18 will be retained?
    We are looking at a similar model like bookmyshow.com. We may not remain as a shareholder with controlling stake but have a sizeable equity in HomeShop18.

    ‘We may launch smaller channels, but there is no rush as such. We are not sure whether we would need a Hindi movie channel at this stage. We have too much on our plate. Our focus will be on profitability and getting the distribution equation right‘
     

    Q. Isn’t there a plan to raise $50 million as pre-IPO funding for HomeShop18?
    We are looking at an external investor as the teleshopping and e-commerce firm needs capital to grow. We are in discussion with existing (SAIF Partners and GS Shopping) and new investors as well. There are many who come and talk to us. In the long term, we may look at raising capital through an initial public offering (IPO).

     

    Q. But isn’t the mandate given to an investment bank to scout for an investor in HomeShop18?
    I can’t comment on that.

     

    Q. Will Network18 exit from yatra.com before or after the IPO?
    We have expressed our intent to offload stake from yatra.com. But it is difficult to say whether it will be a pre-IPO exit or after it. We will see how it goes and what is the market situation then.

     

    Q. How many asset sales are we looking at for getting to the target of Rs 3 billion in the next one year?
    There will be a couple of companies which will fetch us Rs 400-500 million from each transaction. And then there is yatra.com.

     

    Q. Will Infomedia’s printing business form a part of this?
    Yes, it is on the block. But it won’t be a major part of this.

     

    Q. What about your sports marketing company Sport18?
    We are not bidding aggressively for the rights. We have certain rights (Professional Golf Tour of India, India Cyclothon, Hyderabad 10K and the Chandigarh Marathon) and this fits into our TV news business.

  • TV18 to launch home shopping network, receives funding from SAIF

    TV18 to launch home shopping network, receives funding from SAIF

    MUMBAI: Television Eighteen is entering the home shopping network (HSN) space which is already occupied by Subhash Chandra’s Asian Sky Shop and Hinduja’s Shop 24×7.

    The company has secured initial funding from SB Asia Infrastructure Fund (SAIF) Partners to launch an integrated HSN. Though TV18 CEO Haresh Chawla refused to divulge the amount, market sources put the investment of the Asian private equity fund at around Rs 30-40 million.

    TV18 will be putting up a national “virtual platform” network which “will bring forth products and services that have been evaluated by a team of experts.” According to a company statement, the shopping network “will leverage the TV18 network of five channels (CNBC-TV18, CNN-IBN, Awaaz, Channel 7 and SAW) and six internet properties (moneycontrol.com, ibnlive.com, poweryourtrade.com, commoditiescontrol.com, yatra.in and Jobstreet India). Collectively, the HSN will have a pool of more than 70 million adults to tap into – people who are very loyal to the TV18 brands and are decision makers with the ability to spend.”

    The organised shopping market is is estimated to become a $30-35 billion opportunity by 2010. “With a changing socio-economic environment, higher disposable incomes, willingness to spend and availability of cheap credit, the share of organised shopping is all set to increase in the consumer’s wallet. Studies estimate that the spending population is expected to increase from 280 million in 2002 to 686 million in 2010. Nearly 75 million sq.ft. of mall space is estimated to become available in India by 2007,” TV18 said.

    However, the ‘spender’ or ‘spending population’ is not easily accessible at a single point. Poor infrastructure, absence of quality locations and complex taxation issues confront sellers, TV18 said. Additional complications arise on account of the mind-boggling availability of choice. With hundreds of brands hitting the shelves every day, making the right choice takes up a significant amount of time of the spender in the transaction process, thus delaying buying decisions.

    “TV18 believes that the time is ripe for a shopping enabler that integrates our media offering with a fulfillment capability. With an existing franchise of over 70 million adults that TV18s media properties reach out too, and the potential universe of affluent middle class Indian’s, it is only a matter of time before TV18 attains a dominant position in this space,” said Chawla.

    “For the first time, by simply picking up the phone, clicking online, calling on their mobile, or simply ‘sms’ing their requests, people will be able to access and buy products and services that exactly meet their requirements. Our ability to build value and give value back to our viewers is what will differentiate us from the rest”.