IVFA, the majority stakeholders in Radio City, are looking to offload 51 per cent stake in the FM operators. The VC firm is said to be currently engaged in negotiations with a few major corporations according to industry sources
When asked for a response, a Radio City spokesperson said, “Radio City is planning to double its footprint in Phase III. We are therefore looking to raise funds to foster this growth. The mode of raising the capital could be a combination of fresh capital infusion from our investors, loans from financial institutions and/or an IPO depending on the need.” Earlier, media reports had suggested that a proposed IPO might be floated in 2015, though the spokesperson said this might not necessarily be the case.
Two sources familiar with the current situation claim IVFA is looking at Rs 350-400 crore for the 51 per cent stake. Two leading print publications as well as one of India’s biggest business conglomerates are said to either be in or had been in talks recently. One source also claimed that negotiations with a multinational giant broke down earlier this year due to the current 26 per cent cap on FDI in radio.
IVFA had not replied to our email at the time of publishing of this article.
Radio City currently operates in 20 cities including the lucrative metros of Mumbai, Bangalore, Chennai and Delhi. In a recent interview with exchange4media, Apurva Purohit, CEO of Radio City had said that the company is debt-free and has seen EBITDA profits of 30 per cent over the last couple of years. Radio City is considered among the top FM radio stations in the country, in terms of revenues and listenership.
With Phase III auctions expected to take place by early next year at the latest, FM broadcasters have been working to raise funds to fuel the next growth of the FM industry in India. “We have already finished our initial talks with our bankers. We have an expansion plan and we want to be large enough. But, at the same time, we want to focus on cities where the percentage of our audience is highest,” Purohit had told us earlier, when asked about Radio City’s plans for expansion during Phase III.
If these speculations are true, Radio City, as a profitable and established player in a number of key metros and smaller cities, could be a great addition to whoever gets the controlling stake, especially if it is a new entrant to the radio sector.