Domestic broadcasting companies have become the pick of foreign investors having got government approvals to pump in Rs 850 crore in various firms. Rupert Murdoch?s Star Group has accounted for nearly 88% of this amount, putting in Rs 750 crore in its two allied media firms alone.
Also, foreign investments of over Rs 600 crore await approvals for investments in print media firms like Hindustan Media Ventures and the Jagran Group, making the Indian media firms an investment destination for foreign investors.
While Star will invest Rs 425 crore in regional media company Asianet Communications to fund its expansion plans in the regional entertainment channels, it will pump in Rs 324.6 crore in DTH firm Tata Sky which will also lead to an increase in Star?s stake in the third-largest DTH firm.
Star?s investments of Rs 425 crore in Asianet will be via its Mauritius-based subsidiary SVJ Holdings which will then pick up 23.65% in Asianet Communications Ltd (ACL). In 2008, Star had bought majority stake in ACL that broadcasts channels in Malayalam (Asianet, Asianet Plus), Kannada (Suvarna), and Telugu (Sitara). Star is expected to use the investments to further expand in the southern markets.
In Tata Sky, Star?s investments will be through an Indian holding company called TS Investments, a joint venture between Star and Tata group. TS Investments will then pick up 20% stake in Tata Sky putting in Rs 324.6 crore as the initial investments taking the overall foreign investments to nearly 40%, just 9% short of the 49% cap of foreign investments in the DTH sector.
The government also approved a proposal from Mumbai-based Valuable Media to receive around Rs 100 crore in foreign investment for expanding its activities in the digital distribution of cinema in the theatres using satellite-based technology.
However, the foreign investment promotion board of the government is still deliberating on the proposals of Jagran Media, the publishers of Hindi daily Dainik Jagran and Hindustan Media Ventures, the publishing arm of HT Media to attract combined investments of Rs 575 crore. While Jagran Media is looking at Rs 225 crore of foreign investments from private equity fund Blackstone Mauritius in its unlisted arm, Hindustan Media Ventures is seeking Rs 350 crore from various foreign investors including NRIs and FIIs among others.
The government has also held back its approval to a proposal from INX Media to allow New Silk Route, a private equity fund based in Mauritius to increase its stake to 80% because of ongoing investigations by the enforcement directorate.