Foreign investment proposals from various media firms seeking inflow of nearly Rs 800 crore from Mauritius-based investors is set to dominate the crucial meeting of the Foreign Investment Promotion Board (FIPB) on Friday.
This is significant for the media and entertainment sector which has already seen a flurry of foreign investments this year estimated to be over Rs 1,000 crore so far. According to media analysts, the FIPB meeting gains significance as over half-dozen proposals are lined up for clearance at one go.
As per the agenda of the meeting, the FIPB will consider among other cases, proposals submitted by leading media firms including NDTV Lifestyle Holdings, Jagran Media Network, Kal Media, Zee Entertainment, Bharat Broadcasting and others. While the NDTV proposal is new, as reported by FE earlier, some of the others have been deferred by the FIPB.
Prominent among these are two proposals?one from NDTV Lifestyle Holdings and the other from Kal Media Services ? in which Malaysian investment firm Astro wants to pick up significant stakes. NDTV Lifestyle Holdings has sought FIPB nod to divest 49% stake to Astro for $40 million (around Rs 188 crore). NDTV proposes to use the money to fund expansion of its lifestyle channel NDTV Goodtimes, sources said.
Another proposal that is expected to come up before the FIPB on Friday is from regional media giant Sun TV network?s subsidiary firm Kal Media. As reported by FE earlier, Kal Media is looking to divest 37.50% to Astro for around Rs 360 crore.
Astro is already a significant investor in the Sun group ventures including its DTH and FM radio arms. After the FIPB nod, Kal Media proposes to pick up stake in Sun Direct, the DTH arm of Sun Group, thereby leading to an overall increase of Astro?s stake in Sun Direct DTH.
Another significant proposal is from Jagran Media, a group company of Jagran group, the publishers of Hindi daily Dainik Jagran. Jagran Media Network is raising Rs 225 crore from Mauritius-based private equity firm Blackstone GPV Capital Partners in lieu of around 13% stake.
According to sources, FIPB has deferred this proposal from Jagran three times before after objections from one prominent shareholder. FIPB sources indicate the main issue in the proposal was tussle over dilution of the Jagran brand after the transfer of shares to the Mauritius-based investor.
The FIPB is also likely to take up and clear a pending proposal from Subhash Chandra?s Zee Entertainment Enterprises Ltd (ZEEL). The proposal has also been deferred thrice before by the board. According to the proposal, ETC Network, a subsidiary of ZEEL, is seeking the government approval to merge with ZEEL.