The Indian unit of Japan’s Sony Group Corporation is eyeing at least a 26% stake in Arha Media & Broadcasting that owns regional language over-the-top (OTT) platform aha, best known for its Telugu and Tamil content, media industry sources told FE.
The deal value has been pegged at Rs 1,500 crore, according to persons in the know. aha has over 2.5 million Telugu subscribers and is among the top Telugu-language OTT platforms for people in India and diaspora markets such as the US.
Sony Pictures Networks India, also called Culver Max Entertainment, has begun initial discussions with Arha Media, a joint venture between actor Allu Arjun’s Geetha Arts and real estate and media house My Home Group, which owns the TV9 news network, informed sources said.
Arha Media is also talking to Sun TV for a similar stake sale, persons in the know said. It is learnt that KPMG Corporate Finance is advising Arha Media on the strategic stake sale. Both Sony and Sun have the growth imperative in a market that is rapidly consolidating, media experts said. Executives at Sony Pictures Networks India, Arha Media and Sun TV were not immediately available for comment.
For Sony, new acquisition targets and tie-ups are the next step in its life beyond Zee, a point that has recently been reiterated by its top executives both in India and Japan. In an earnings call last week, Hiroki Totoki, president, COO & CFO of Sony, said India was a very appealing market where it would continue to invest for the future. “India, on a long-term basis, has a great growth potential. It is a very appealing market. Therefore, we will try to seek various opportunities and if we can find another opportunity that would replace this type of plan,” Totoki said when asked about the company’s strategy in India after the termination of the proposed merger with Zee last month.
Sun TV, on the other hand, is looking to consolidate its presence in the regional language content space. According to Tracxn data, aha’s annual revenue for the financial year ended March 31, 2023 stood at $15.4 million (around Rs 125 crore). The bottom line figure for the period was not immediately available.
In FY22, Tofler data show, the company had reported revenues of Rs 75.9 crore, compared with Rs 26.4 crore for FY21. Net loss, however, widened to Rs 92.4 crore in FY22 versus a net loss of Rs 72.1 crore in FY21.