The Union Cabinet has fulfilled the wishlist of the FM industry. On September 11, the Cabinet gave its nod to FM broadcasters to set up subsidiaries, amalgamate or demerge through transfer of shares of companies less than five years in operation. However, the FDI limit, which is at 20 per cent, remains untouched.
It may be recalled that as part of our coverage on Independence Day celebrations this year, exchange4media had spoken to a cross-section of FM players in India, where nearly all of them had said that they wanted ‘independence from regulations’.
Following the Government’s decision on September 11, exchange4media went back to the FM players to gauge their reactions and found that they are happy with this move and see the Government decision as positive for the growth of the radio industry in India.
Apurva Purohit, President, AROI and CEO, Radio City, said, “This comes as a very favourable move for the industry, especially for broadcasters who had applied for this demerger. We are hoping that this announcement will also pave the way for further deregulation for the industry by way of increased FDI, multiple licensing and allowing news and current affairs on FM radio. We eagerly look forward to Phase III and hope that the Government works on expediting the process.”
Anurradha Prasad, Managing Director, BAG Films and Media Ltd, said, “It is a very positive move by the Government, which helps us unlock the value of our companies. It should be like broadcast companies, where there is a different section for content, marketing, sales and so on. It would help us in growing the FM as an industry because of the fixed FDI norm. I believe this is a good way to have mergers. This way, your holding company will not be involved.”
Himanshu Shekhar, Regional Head-North and West, Big FM, said, “We are happy with the decision taken by the Cabinet today. This is a step in the right direction. It would help companies having multiple businesses carve out the radio business into a separate legal entity. Being an independent legal entity, it would have financial flexibility to raise resources for future growth. Valuation of the FM radio business on stock exchanges would help substantial unlocking of shareholder value.”
S Keerthivasan Business Head, Fever FM was not happy with the Government’s decision to not hike the FDI rates. “With a mere 20 per cent of FDI what can you expect from the industry?” he asked.
Anil Srivatsa, COO, Radio Today, said, “It is a wise move by the Government. Increasing the FDI rates could be looked into next time round. Phase III means a lot for us now, and the decision made by the Government is a step in the right direction. The business has finally grown up.”
The Indian radio industry definitely has come of age with the Government showing some signs of deregulation, leaving an upbeat mood in its wake.
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