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Investors bullish on Indian media, but stress on RoI

25-March-2011
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Investors bullish on Indian media, but stress on RoI

The investment community has always been a mixed bag when it comes to investing in the media and entertainment business. In this era of economic flux, innovative ways have been evolved to bring in money into the media and entertainment sector.

exchange4media catches up with experts from the financial sector to find out whether the media and entertainment sector has lived up to the promise for investors.

The second day at FICCI Frames 2011 brought together a number of formative players and ways to finance and play a vital part in investments and acquisitions in this pulsating sector. The panel consist of speakers namely Karan Ahluwalia, EVO, Media & Entertainment, Yes Bank, Ranu Vohra, MD & CEO, Avendus Capital Pvt Ltd, Nirvaer Sidhu, VP, Media & Entertainment, GoldmanSachs India. Bobby Bedi, MD, Kaleidscope Entertainment and Jane Corden, CEO, Moneypenny, Australia while the session was moderated by Ashok Wadhwa, Group CEO, Ambit.

As advertisers, Karan Ahluwalia, EVO, Media & Entertainment, Yes Bank, and Nirvaer Sidhu, VP, Media & Entertainment, GoldmanSachs India, agree that there are a lot of opportunities to invest in Indian media, especially post the economic slowdown. According to Sidhu, there was a billion worth of capital that was being raised, but the risk investment was even higher. As a financial sector client, a mix of new movies and investing finance was a good idea, but the task would be to monetise that return on investment. However, for a financial person, a balance of communication between studios and production houses was much needed.

As for Ahluwalia, the question was not about being interested or being averse to investing in the Indian media. But the question was of ensuring that the business model was robust, the function governed well, and the systems and processes in place. He remarked, “I know we are dealing in creative businesses, but if we look at media, it is just not limited to films – there is television advertising, publications and print, so with all of that, the opportunity of investment is only increasing, and I think there has been enough talk about digitisation and how the numbers are going to grow. Like someone said, there is enough opportunity growth across all the verticals, and I think all of that collectively will see a lot a growth in the entire media industry pie. So yes, the market is still very interesting to be invested, especially with more emerging players invading the market. However, time will tell while consolidation too is happening simultaneously.”

Stating that he was an optimist, Wadhwa noted, “Fortunately, post 2008, the larger Indian media is as attractive as it was before 2007. Just that the sector has to understand that they compete for the same capital with the other industries, and if they are not able to deliver the returns on investment, that capital will go elsewhere. However, the opportunities are as huge as before.”

The financial experts agreed that whatever be the economic scenario, the Indian media industry would be strong in terms of investment. They, however, stressed on reforms and processes being in place so that it did not turn out into a lost opportunity.
 

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