New Delhi: Diligent Media Corp. Ltd, the company that publishes Mumbai-based English daily, Daily News and Analysis, better known as DNA, plans to launch new editions and acquire newspapers in various key markets, and could consider a private placement or share sale later in the year to fund these.
Diligent Media is a 50:50 joint venture between the Bhaskar Group, publisher of the country’s second largest read Hindi daily Dainik Bhaskar, and Essel Group, the diversified conglomerate promoted by Subhash Chandra that runs several television channels under the Zee brand.
“DNA, which launched in 2005 in Mumbai, has set for itself a scorching pace of expansion this year in the form of acquisitions and new editions,” said K.U. Rao, chief executive officer, Diligent Media. He refused to provide more details.
Two senior executives in the Essel Group and Diligent Media who didn’t wish to be identified said that the company is currently talking to three newspapers, the Nagpur-based The Hitavada, the Bangalore-based Deccan Herald and the Thiruvananthapuram-based Keralakaumudi for acquisitions. “We will approach a Telugu paper as well,” one of the two executives said without revealing its name.
The three newspapers, however, denied that they were in talks with Diligent Media. The Hitavada’s managing editor Banwarilal Purohit, Deccan Herald’s joint managing director K.N. Tilak Kumar and Keralakaumudi’s chairman and editor M.S. Mani said they had no intention of selling their newspapers.
DNA currently has four editions—Mumbai, Pune, Ahme-dabad and Surat. Four new editions—Baroda, Jaipur, Indore and Rajkot—are already in various stages of launch and the management is chalking out strategies for a strong southern push. “In Bangalore, we’ll be present in some form by the end of this year,” Rao said. The company will also target major English-speaking centres in the south such as Chennai and Hyderabad, he added.
To fund its aggressive expansion, the company will consider raising funds either through a private placement or an initial share sale in the second half of this year, Rao said. “Right now, however, all our expansion plans are adequately funded,” he added. DB Corp. Ltd, the holding company for the publishing business of the Bhaskar Group, has already filed a draft red herring prospectus with the Securities and Exchange Board of India for an initial public offering of the group.
DNA’s expansion will receive an impetus when deliveries of the new printing presses ordered by the firm start in April. DNA and the Bhaskar Group had jointly placed orders worth Rs570 crore with German printing press manufacturer Koenig and Bauer AG. The “double width single circumference” KBA Prisma presses will enable DNA and Bhaskar to set up four printing lines, each of which will have a capacity of 670,000 broadsheets in a typical print cycle of three-four hours, said R.D. Bhatnagar, chief technology officer of Bhaskar Group.
“Most national newspapers have recognized that regional markets have a lot of potential and that they are also growing at a faster rate. There is a lot of value to be unlocked in the regional newspapers if large newspaper groups apply their managerial and marketing expertise there,” said Rajesh Jain, who heads the information, entertainment and communication practice at audit and consulting firm KPMG. “Right now, there is a huge gap in the advertising rates of regional and national newspapers. At a time when many national advertisers are looking to penetrate into regional markets, it’ll help to have a diverse portfolio of print properties,” he added. According to the latest round of Indian Readership Survey released in September 2007, DNA enjoys an all India readership of 632,000.
The Hitavada has a readership of 134,000 while the Deccan Herald has a readership of 477,000. Keralakaumudi, a Malayalam daily, has a readership of 734,000.
The Hindustan Times, which competes with DNA in Mumbai, is published by HT Media Ltd, publisher of Mint.