With the Union Cabinet’s decision to permit foreign direct investment (FDI) in print media up to 26 per cent, the share prices of print media companies have shot up significantly in recent times. Among the most actively traded print media stocks, Mid-Day Multimedia showed a significant improvement as its share price appreciated from Rs 23.50 on June 21, 2002 to Rs 28.75 on June 28, 2002 — a gain of Rs 5.25 on The Stock Exchange, Mumbai (BSE). Similarly, Sandesh has been gaining steadily. Its price increased from Rs 105 to Rs 119.55 during the same period.
This upward trend in print media stocks can also be seen in a study of market capitalisation (M-cap) of 12 stocks during June 21 and June 28, 2002.
The aggregate M-cap of 12 quoted print media companies rose by Rs 52.59 crore (6.26 per cent) from Rs 840.57 crore on June 21 to Rs 893.16 crore on June 28, 2002.
Most of the companies like Mid-Day Multimedia, Digital Multiforms, Shakti Press, Sandesh and Navneet Publications were responsible for this increase in M-cap.
Significant increase was seen in the case of Mid-Day Multimedia, whose M-Cap increased by 22.34 per cent to Rs 97.86 crore from 79.99 crore. But the company’s net profit declined by 50.2 per cent to Rs 4.30 crore during 2001-02 from Rs 8.63 crore during 2000-01.
Among these 12 companies, a moderate increase in M-Cap was seen in the case of Navneet Publications (up 5.64 per cent to Rs 348.32 crore on June 28, 2002). This despite a moderate growth of 14.42 per cent in net profit during 2001-02 to Rs 32.22 crore (Rs 28.16 crore).
However, it would be a mistake to think that all print media stocks showed an upturn. Only three, namely Kiran Print (16 per cent), Macmillan India (0.3 per cent) and Computerskill (8.07 per cent) showed a decline in M-Cap during the study period. The M-Cap of Macmillan India declined to Rs 198.94 crore from Rs 199.53 crore.