As Mukesh Ambani announced a massive diversification into broadcast media on Tuesday, his close confidant Manoj Modi again played the key role in sewing up the deal for his former college mate Ambani. What was once supposed to be hawked a few months ago will now be the data driver for Reliance Industries? fourth-generation (4G) broadband business.
Modi, who helped build Reliance Communications in mid-2000 with new technology code division multiple access (CDMA) competing against existing GSM players, clinched the deal from the jaws of Sony Entertainment Television, a person directly involved with the negotiations said.
Modi?s quick thinking of the need to build a data warehouse to feed its 4G broadband service tilted Reliance from a seller to a buyer.
?Sony had almost signed up with Reliance Industries to purchase Eenadu Television, but Modi took the deal away,? the same person said, who refused to be quoted on such sensitive issues.
Low profile Modi has always worked behind the shadows of his chairman for more than two decades now in building communication network, retail chains, and now, broadband.
Last year, Ambani took another diversification to hospitality sector. His group company purchased a significant stake by playing a white knight in East India Hotels, which runs The Oberoi Chain of Hotels, and had an option to appoint two directors on the board after it increased its stake to over 14%.
Ambani chose his wife Nita Ambani and his University of Department of Chemical Engineering college mate Modi to represent RIL in EIH.
Modi, one of the highest individual income tax payers who won Rashtriya Samman Patra awards, also played the anchor role in a win-win deal sewing up Network18 after nearly six months of negotiations.
In April last year, Raghav Bahl, the owner of Network 18 which owned a bouquet of news and entertainment channels, arrived in Hyderabad with a proposal to purchase Hyderabad-based Eenadu Television, of which Mukesh Ambani India?s richest Indian had a significant stake. Eenadu group, with a bouquet of regional channels, is owned by Ramoji Rao, another media baron.
The richest Indian had invested through his friend and ace investment banker Nimesh Kampani a significant stake in the company which owned five regional channels, equal interest in another five regional channels and a 24.5% stake each in ETV Telugu and ETV Telugu News.
Raghav Bahl, who build Network 18 from scratch to a media empire primarily through debt, wanted to expand his media empire to southern India and found Eenadu to be the right vehicle. Mukesh Ambani had been in the market along with Ramoji Rao to sell Eenadu TV. Bahl was looking at an overseas listing to raise money to fund purchase.
After a series of negotiations for over a month, both companies decided to call it off as there was mismatch in valuation. Though the talks between the two ended, the Eenadu TV owners were keen to sell it and had put out a word in the market.
Network 18?s rival in general entertainment channels, Sony Television, was keen to purchase Eenadu Television to expand into southern India.
A deal was struck and Sony was to pay nearly R2,600 crore. But, the Reliance push to build data content tilted RIL to play a white knight again. Finally, a win win deal as Network 18 and TV 18 will be debt free companies and RIL can fill its tube with enough data for its subscribers from March.
