In order to capitalise on the increased FDI limit in the Indian multimedia industry and to meet the future growth needs, Sun TV Network has decided to allow Mauritius-based South Asia Multimedia Technologies Limited, an investment arm of Malaysia-based Astro group, to increase its stake in its FM subsidiary South Asia FM Limited to 20% from the current 6.98% for an undisclosed sum. South Asia Multimedia Technologies Limited had in January 2008 indirectly picked up 6.98% stake. The other major shareholder of the South Asia FM is Red FM of NDTV group.
In order to accommodate the Astro group arm as a major equity partner in its FM arm, Sun TV Network promoters have decided to dilute 5% of their stake to bring down to 60% on the expanded capital of the FM arm, said market sources here. Interestingly, Astro group is also the equity partner of Sun TV Network’s DTH arm?Sun Direct – with 20%.
According to sources, South Asia Multimedia Technologies is believed to be investing close to Rs 100 crore more for its stake in the South Asia FM Limited. South Asia FM, is one of the two FM arms of Sun TV Network and owns 23 FM stations across the country of which 21 are under operational, the sources added. Kal Radio is another FM arm with 21 FM stations and all are operational.
The move to bring in foreign partner into FM arm aimed at meeting additional funds requirement for its business growth as well as to meet working capital requirements. While the revenues of the FM arms grown by manifold to Rs 33.17 crore for the fiscal ended March 31, 2009 from Rs 8.87 crore in FY 2008, however, they continue to incur huge losses which touched a high of Rs 68.79 crore as compared to Rs 40.28 crore a year ago.
Meanwhile, Sun TV Netwok has on Wednesday announced that it has reported a 19% growth in its net profit for the fiscal ended March 31, 2009 to Rs 437.11 crore as compared to Rs 366.97 crore in the previous year due to higher ad rates and increased revenue from its DTH arm. The total income grew 18% to Rs 1,091.52 crore as compared to Rs 925.99 crore.
Despite slowdown and recession, the company has been able to post a better results as the channels have been able to continue its advertising growth because of a well-diversified mix of clients (national, regional and local) across multiple product categories.
The accelerated growth in the subscription revenues from the DTH platform continued to maintain its pace in the current quarter as well with the Sun TV Network being viewed by over 4.37 million subscribers across India. The quarter also recorded an increase of about 3% in the cable revenue subscription as against previous quarter.
