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Reliance is committed to keeping long term majority stake in RBNL: Tarun Katial

02-March-2016
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Reliance is committed to keeping long term majority stake in RBNL: Tarun Katial

There has been speculation on Anil Ambani’s Reliance Broadcast Network Ltd (RBNL) looking to sell stake since the past few months, further fueled by the fact that Ambani has been looking to off load his stake in the media business since awhile now.

The speculation in the market place however has heated up even further since last week,   with rumours of ongoing talks between Subhash Chandra-owned Zee acquiring stake in RBNL. We catch up with Tarun Katial, CEO of RBNL, to clear the air on the subject. 

“We are running a process and this is a long process I am personally not aware what the shortlists of the process are. Reliance is committed to keeping long term majority control in stake,” said Katial.

The process is estimated to have been initiated around 3 months ago and is being handled by EY (earlier known as Ernst & Young)

Speaking about any potential partnerships, we asked Katial what RBNL was looking for in a partner. “I think the company is fairly well run so it isn’t looking for too much of leverage around but different partners add different value. There could be partners that link us to different avenues of growth or a strategic partner who could add different kind of dimension to it, so it depends,” he said.

He also clarifies that bringing a new partner to the company was a natural process. "We are talking about of allowing 40 per cent, there is no closure to that, but yes we have kept that as a strategic option to be able to invest more in the business going forward," he said.

Further elucidating on why the time is currently right for external investments, he pointed out that a lot of investments had been made by the company during the recent Phase III auctions by increasing the coverage footprint to 61 cities with sales tie-ups in Ahmedabad and Siliguri, and the 14 new frequencies added by the channel post phase III auctions in addition to the earlier 45.  

Apart from this efforts were also made over the last 18-20 months to reformatting the radio stations as per the company's target to monetize themselves. 

"The results (of these efforts) as well as the launching of some very rich content like Annu Kapoor's ‘Suhaana Safar’ and ‘Yaadon ka Idiotbox’, etc., were paying off very well so our bottom line grew seriously phenomenally, if you look at our 3 year trajectory." he said, further adding that the company felt that now was the right time to bring in a new partner and monetise the investment.

He also noted that ad rates have increased close to 70 per cent as compared to last year.

The first of Big FM's new stations would be operational by April or May of this year. 

Speaking about the strategy for the new bouquet of channels, Katial opined that Big FM will make it a point to do only things in line with consumer expectations. He said that the company is undertaking research with research partners on the cost of markets they are entering to test various formats, including local Hindi, old, new, mix of two languages, eras, etc. 

This is a noticeably different approach from Big FM's retro approach that it has created over the past months and has been extremely successful for the company. However, Katial points out the reasoning behind this, "We have to be very consumer centric so we cannot be foolish because if the city cannot adapt well to retro music; if it is a young city, we won't do it (retro programming). But, yes, if we can find a great niche or interest for retro in a city then that will be our first option and logically so because now we have so much rich content in that segment we can deploy, utilise, cross sell and cross promote. We still want to test it. As far as possible we will keep it 92.7 Big FM. I think there is still room for retro in the country. There may be some cities which may not adapt to it like even today. For example, our Punjab network is not retro because Punjab is a market which is very new current high tempo."

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