New Delhi: Jagran Prakashan Ltd (JPL), which publishes the country’s largest-read newspaper Dainik Jagran, has acquired the Madhya Pradesh-based Hindi daily Nai Dunia for an effective enterprise value of Rs 150 crore.
JPL informed BSE on Monday that it has acquired Suvi Info Management (Indore) Pvt. Ltd, which runs Nai Dunia through its subsidiary Nai Dunia Media Pvt. Ltd.
“Suvi Info Management is the holding company for Nai Dunia. Vinay Chhajlani and several other persons and companies have shares in Suvi, which have been acquired by us,” said Mahendra Mohan Gupta, chairman and managing director of the Jagran group.
Nai Dunia, with a circulation of nearly 500,000 copies a day, is printed in Gwalior, Indore, Jabalpur, Bhopal (in Madhya Pradesh) and in Raipur and Bilaspur (in Chhattisgarh). It is among the 10 most-widely read newspapers in the country, according to the Indian Readership Survey (IRS).
Mint reported on 30 March that the Jagran group was set to announce the acquisition of Nai Dunia, after the two sides agreed to exclude the loss-making Delhi edition from the deal. The edition hasn’t been included in the transaction announced on Monday.
The Delhi edition of the paper was shut on 29 March. However, the staff in the city and the paper’s editor Alok Mehta found a new investor and launched another newspaper National Dunia the next day.
Chhajlani, director of Suvi Info Management, said the decision to sell Nai Dunia was a “tough call but the right call. There were two options: to continue operating Nai Dunia as a sub-scale brand and not know if it would make money, or to explore selling it off for the longevity of the brand. I have extended the life of the newspaper started by my grandfather.”
Nai Dunia was started by three families—the Tiwaris, Sethias and Chhajlanis—in 1947. Six years ago, Vinay Chhajlani acquired the shares owned by the Sethias to become the largest shareholder of the paper in Indore. In Bhopal, however, the Nai Dunia title is owned by the Tiwaris and Chhajlani runs the paper under the Nav Dunia brand.
Gupta isn’t perturbed by the title ownership in Bhopal. “Nai Dunia has a very marginal presence in Bhopal. We have Nav Dunia in that city,” he said. “We also have a clean slate in Delhi as we did not want the edition here.”
The focus will be on expanding the business. Chhajlani will continue as an adviser on the board for a while to ensure a smooth transition, Gupta said.
Acquiring Nai Dunia was a logical market expansion for the Jagran group and will strengthen its presence in central India. “In a greenfield project, reaching a circulation of 500,000 copies would have been a very capital-intensive exercise,” Gupta said.
With the acquisition of Mid Day (in 2010) and Nai Dunia, the company is achieving growth that gives it sizeable scale at a lower investment and shorter gestation period than is typical of the print industry, Gupta said in a press statement. “The acquisition will help us to leverage our existing network and we will have significant operating synergies,” he said.
Jagran Prakashan Ltd lost 1.24% to close at Rs 99.35 on Monday on BSE. The benchmark Sensex gained 0.42% to close at 17,478.15 points. In the past one year, Jagran has lost 19.94%, compared with the Sensex’s 10% drop.
Amit Sharma, research analyst at Wallfort Financial Services Ltd, expects more acquisitions in the media sector, more so in the print segment, as a means of cutting short the long gestation period.
“Acquisitions (of existing media brands) is the right thing to do. There are a lot of synergies on marketing and branding efforts, and ultimately it greatly benefits investors,” he said. “The Mid Day deal and now Nai Dunia puts Jagran on the map as an ambitious media brand.”
The Jagran deal could add strength to Nai Dunia outside Madhya Pradesh and Chhattisgarh, said Janardhan Pandey, associate vice-president of media buying unit Mudra Max, part of the Mudra Group.
For Jagran, the deal is important because it can compete with rivals Dainik Bhaskar and Rajasthan Patrika, which have a major presence in Madhya Pradesh. “Jagran can take over an existing set up and expand it to effectively tackle and quell competition,” said Pandey.
Jehil Thakkar, executive director at KPMG Advisory Services Pvt. Ltd, said newspapers are acquiring portfolio brands (in regional markets) in order to get a quick and dependable presence. “They realize that any sort of growth is going to come from the regional markets. That’s why Lokmat Media Ltd launched greenfield editions. And that is why you have groups like Dainik Bhaskar and Hindustan launching new editions on a continuous basis,” he said.
Hindustan, published by Hindustan Media Ventures Ltd, a subsidiary of HT Media Ltd, which publishes Mint and Hindustan Times, competes with Dainik Jagran.
Ashwin Ramarathinam contributed to this story.