New Delhi/Chennai: The publisher of southern editions of The Indian Express newspaper, Express Publications (Madurai) Ltd, plans to launch an initial public offering (IPO) sometime soon. Before that, it plans to sell stake to a private equity firm. The company is working on an aggressive expansion plan and the funds raised through these will help it bolster its operations and expansion.
The company is known as The New Indian Express group because it was carved out from the old group in 1999 following a family litigation that started after the death of the founder of the group, Ramnath Goenka; the other part became The Indian Express Newspapers (Mumbai). The company has appointed YES Bank to look for private equity investors.
“Private equity is the logical route for the group to take,” said Manoj Kumar Sonthalia, chairman and managing director of Express Publications. The New Indian Express is published from 14 centres in the South. Apart from The New Indian Express, the group also publishes two vernacular dailies, Kannada Prabha and Dinamani, a Tamil daily, and claims a combined circulation of around 5,50,000 for all its publications.
Though the split between The New Indian Express Group and The Indian Express Newspapers (Mumbai) Ltd, is complete, the two still share content and advertisement. However, both companies have dismissed the possibility of a merger.
“There is absolutely no truth in the buzz (of a merger),” said Sonthalia. A senior executive of The Indian Express Newspapers, who didn’t wish to be identified, also denied it.
The Indian Express Newspapers (Mumbai) is also looking at tapping the market for an IPO some time soon and is, reportedly, scouting for private equity. “We are looking at all possible options to raise funds for our restructuring and expansion,” said Vaidehi Thakar, director, corporate legal, Indian Express Newspapers (Mumbai). Vivek Goenka, the adopted son of Ramnath Goenka, holds more than 90% equity in the Mumbai company.
The entire stake in the south-based company, however, is held by Sonthalia and his family. Sonthalia refused to divulge how much equity he and his family would dilute during the IPO. The group is also open to selling a stake to a foreign investor. Indian laws allow up to 26% foreign direct investment (FDI) in news and current affairs publications.
Sonthalia admitted that the group has not been doing well: “Past some time had been turbulent for us and we did not take advantage of the market. But, now we are activating all our publications to show growth.” The group aims to increase circulation of its flagship newspaper, The New Indian Express, to 1 million and attain a readership of 4 million. At present, The Hindu is the dominant player in Tamil Nadu, while Deccan Chronicle and The Times of India are the market leaders in Hyderabad and Bangalore markets.
Declining to give any details on his turnover or profits, Sonthalia said that the company was “not in the red (making losses)”. “I would say we are financially strong,”he added.