Players operating in the media space, particularly the entertainment segment, have found new avenues to raise money. They are shunning the preferred routes of funding like public or preferential issues and are instead rushing to private equity (PE) players to mop up funds for their on-going as well as future expansion-cum-acquisition plans.
Names of some media companies that are doing the rounds are Dish TV, UTV Software & Communication, PVR, Pyramid Saimmira Theatre and Balaji Telefilms. According to sources, the media players plan to raise anywhere between $ 75 million to $ 150 million by offloading a part of the promoters’ holdings in their respective ventures.
Dish TV was originally planning to raise funds by way of preferential allotment to Astro which it called off later. The company is planning to raise funds to the tune of Rs 250 crore from Indivision India Partners, a Mauritius-based PE player. The company will raise the money by way of issuing a combination of equity shares and warrants, which could be converted into equity capital later. Similarly, Balaji Telefilms is contemplating raising resources from private equity players for the expansion of its motion picture division by placing 10% to 15% stake in its subsidiary, Balaji Motion Pictures Ltd.
UTV Software is reportedly scouting for a strategic partner to scale up its television broadcasting business. However, the company has not yet finalised the extent of equity dilution the promoters want. PVR, the entertainment and multiplex major, is also said to be on the lookout for private equity funding to scale up its movie production business. Pyramid Saimmira, which had hit the primary market with its IPO recently, is also understood to be looking for private equity funding. Both the companies are sprucing up their movie production business besides expanding their reach to new cities.
According to analysts, valuations of media companies are now very good and through the private equity route they could close the deal faster than in other routes. Also, promoters of these ventures are relatively small and funding their massive expansion plans may be difficult right now.
