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  1. Here’s what Porinju Veliyath has to say on Reliance Industries’ 25% stake buy in Balaji Telefilms

Here’s what Porinju Veliyath has to say on Reliance Industries’ 25% stake buy in Balaji Telefilms

The renowned investor Porinju Veliyath says that the deal is a win- win for both Balaji and Reliance Industries as Balaji Telefilms gets the capital as well as the captive market of Reliance Jio which has nearly 7 crore customers.

By: | Published: July 21, 2017 11:48 AM
The downward risk seems to be very little, says Porinju Veliyath (Reuters)

The renowned investor Porinju Veliyath says that the deal is a win- win for both Balaji and Reliance Industries as Balaji Telefilms gets the capital as well as the captive market of Reliance Jio, which has nearly 7 crore customers. Porinju had been bullish on the Balaji Telefilms stock even prior to the deal. In conversation with CNBC- TV 18, the MD and portfolio manager of Equity Intelligence India, said in response to whether the stock is still attractive given that it has run up by more than 100% in the last one year, “ The investors need not get excited in the short- medium term, but this can become a big story going forward. The investors should approach the deal with an open mind. I think the downward risk seems to be very little”.

In a telephonic interview with CNBC- TV 18, he said that this deal can take Balaji to the next growth orbit altogether. Commenting on the the positives for Reliance, Porinju quoted Mukesh Ambani as saying, “Data is the new oil”, and therefore this deal is in complete sync with the statement. Porinju feels that it would be an excellent extension of the value chain for Jio. Hence, according to him there appears to be a lot of synergy.

Porinju said that he had  always been bullish in the media sector. In the same conversation, he mentioned that there’s a lot of growth opportunity for smaller unlisted entities to enter the space as India is a huge market with 1,300 million people and there’s hardly any market capitalisation. Currently, Zee Entertainment has a market cap of 50,000 crores and Sun TV network, the Indian mass media company headquartered in Chennai, has a market capitalisation of around 32,000 crores, he said. He predicts that the next 5-10 years will bring about an exponential growth in listed media.

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