Radio Mirchi has acquired Oye FM. Terms of the deal remain undisclosed. Industry insiders indicate the deal is worth around Rs 50 crore. Oye FM was put up for sale by owners TV Today Group last week after consistently bad financial quarters.
We had earlier contacted ENIL (the parent company of Radio Mirchi) MD and CEO, Prashant Panday and India Today Group CEO Ashish Bagga but were unable to get comments from them at the time of publishing. However, this evening ENIL filed an announcement with the BSE acknowledging that they have acquired Oye FM from TV Today Group.
ENIL reported healthy financials for the quarter ended December 31, 2014. Radio Mirchi reported a 27 per cent increase in Q3 net profit at Rs32.9 crores. Consolidated revenue for the quarter was up 18.7 per cent to Rs 117 crores.
Why Oye FM makes sense for Radio Mirchi
If the acquisition does go ahead, it could make perfect sense for Radio Mirchi. Oye FM has operations in seven cities, including Delhi, Kolkata, Amritsar, Mumbai, Jodhpur and Patiala, but it will most likely be the licenses in Delhi and Mumbai, which would have interested any potential buyer.
The new licenses available in Mumbai and Delhi are limited; just one for Delhi and two for Mumbai, and this is bound to create a huge pressure on operators. Most of the major stations are already present in these cities but an extra frequency will always be welcome, especially since these markets are the most lucrative in India. In fact, reducing the frequency gap, which would have allowed more stations per city was something that certain radio stations had asked the ministry to consider; an idea that was finally rejected by the MIB.
Radio Mirchi is a well-known and respected brand name and is considered an industry leader in the FM sector. Radio City and Fever 104 FM currently lead the Mumbai and Delhi markets respectively but Radio Mirchi is not that far behind in terms of popularity. With another frequency in these cities, the radio station also has the opportunity to experiment with different content formats to cater to a wider audience.