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TV18 to raise fresh funds to power expansion

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TV18 to raise fresh funds to power expansion

Television Eighteen India Ltd (TV18) is planning to raise fresh funds for the company’s expansion plans. Confirming the move, Haresh Chawla, Chief Executive Officer,CNBC-TV18, said, “We are looking to raise funds for the expansion of our existing operations and to infuse funds to improve our Hindi programming”. But he refused to divulge the amount the company would look to raise.

The decision to raise funds will be taken by the company at its Board of Directors (BoD) meeting on May 18, the company said in a notice to the Bombay Stock Exchange on May 11, 2004. In the notice, the company has also stated that they would be looking to consider the introduction and implementation of the TV18 Employee Stock Option Plan, 2004 and the TV18 Employees Stock Purchase Plan, 2004.

It is understood from sources that the company is launching a full-fledged Hindi business news channel during the course of the financial year and part of the fresh funds would go towards investing in fresh programming for the Hindi business channel.

As is understood from the market sources and media analysts tracking the company closely, the requirement of the company is expected to be in the range of Rs 200 million for the Hindi channel. The channel would broadcast Hindi business news, and programmes on consumer finance and investing.

Over a period of time, the Hindi channel is expected to exceed that of CNBC-TV18, according to media analysts. Currently CNBC-TV18, airs around three to four hours of bi-lingual (Hindi and English) programming. “We believe this will be done away with in favour of the Hindi channel,” says the latest and one of the first media sector report for year 2004 from Karvy Stock Broking.

Analysts are gung-ho about the company. From a content provider owning a 49 per cent stake in the disseminating platform, TV18 has become a full-fledged broadcaster (with 90 per cent stake).

According to the Karvy Stock Broking report, “With an all India channel share of 31 per cent and over 10 million viewership, TV18’s business model looks attractive”.

During the third quarter of the financial year 2003-04 TV18’s revenues jumped 39 per cent to Rs 152 million quarter-on-quarter (QoQ) growth, while EBIDTA margins at Rs 68.45 million were up 90 per cent (QoQ). EBIDTA margin was a good 45 per cent, while incremental EBIDTA margin was a huge 75 per cent. “Improving inventories utilisation, higher advertising rates, more number of advertisers and committed subscription on a mostly flat expenditure base contributed to the strong profitability,” says the report. The company is expected to come out with better results for the year ending March 31, 2004.

The TV18 stock closed the day on May 11, 2004 at Rs 205.15, down 5.68 per cent over the previous day’s close.


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