Print powerhouse Malar plans IPO for its Hello FM radio station

Print powerhouse Malar plans IPO for its Hello FM radio station
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First Published: Wed, Aug 22 2007. 02 50 AM IST
Updated: Wed, Aug 22 2007. 02 50 AM IST
Malar Publications Ltd that publishes Tamil Nadu’s largest evening daily, Maalai Malar, plans to sell shares in its radio operation Hello FM through an initial public offering (IPO) within the next 12 months, aiming to parlay a growing market for private radio broadcasting into capital.
The offer of sale of shares to the public will be the first from the state’s largest vernacular print-media house. Malar Publications is part of the Daily Thanthi Group that publishes one of India’s largest selling newspapers, Daily Thanthi, with a turnover of around Rs350 crore.
“The market is very radio-friendly”, said Rajeev Nambiar, president and chief operating officer of Hello FM. “There is a growing demand for radio as a cost-effective medium to reach the target audience,” he added. Nambiar declined to say how much the company intended to raise from the share sale.
The size of the radio advertising market in Tamil Nadu is estimated at Rs50 crore, and Chennai, with 10 FM stations, constitutes 60% of the market. Radio accounts for about 5% of the total ad spend of around Rs1,000 crore in Tamil Nadu, according to advertising agency Ogilvy & Mather (O&M).
The ad spend in radio is projected to clock double digit growth, as more people spend time commuting and technology makes it possible to listen to radio stations on a mobile phone.
Malar Publications launched Hello FM in Chennai last October, and will open in an additional six cities in Tamil Nadu by the end of next month.
The group has spent Rs25 crore in acquiring licences for operating the stations, and has earmarked an additional Rs35 crore on infrastructure and marketing expenditure. So far, the group has funded the company through internal accruals, said Nambiar. He added that the expansion, too, would be funded the same way.
Even as Hello FM plans its six new stations, it has floated three new divisions to leverage the company’s strength in managing events, creating radio advertising and managing outdoor media. The company hopes to generate around a fifth of its revenue from these three divisions: Lighthouse (events management), Blue n’ Orange (agency for radio advertising) and Standout (Outdoor media).
Apart from radio stations, Malar Publications has recently applied for a satellite TV licence to start a Tamil channel, which will have a mix of entertainment and news. The channel is likely to be launched by July 2008, Nambiar said.
The market for Tamil satellite channels is crowded, with Raj TV recently announcing the launch of Kalaingar TV from September 15. However, the Sun Network, with its flagship channel Sun TV, is the market leader.
While Malar Publications is an unlisted public limited company run by Balasubramanian Adityan, Daily Thanthi is run by a trust, whose managing trustee is Balasubramanian’s father, Sivanthi Adityan.
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First Published: Wed, Aug 22 2007. 02 50 AM IST
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