India allows 100% foreign direct investment in non-news media and limits FDI in newspapers and news magazines, radio and television news channels at 26%. The Telecom Regulatory Authority of India recently proposed increasing the FDI limit in news television and private FM radio broadcasting to 49%. Photo: Mint (Mint)
India allows 100% foreign direct investment in non-news media and limits FDI in newspapers and news magazines, radio and television news channels at 26%. The Telecom Regulatory Authority of India recently proposed increasing the FDI limit in news television and private FM radio broadcasting to 49%. Photo: Mint
(Mint)

New Silk Route in talks with investors to sell 9X Media stake

NSR holds about 80% in 9X Media, while managing director Pradeep Guha holds nearly 15% in the channel

Mumbai: Private equity firm New Silk Route (NSR) is in talks with other buyout firms and strategic investors to sell its entire stake in 9X Media Pvt. Ltd (formerly INX Media), which operates the country’s largest music television network.

NSR holds about 80% in 9X Media, while managing director Pradeep Guha holds nearly 15% in it. A few individual investors hold the balance 5%.

“There is significant interest for the company from both PE and strategic investors that we are in the process of evaluating," said Darius Pandole, partner, New Silk Route Advisors Pvt. Ltd, without divulging the names of the potential buyers or the likely valuation of the company. “It’s too early," he said.

NSR invested an undisclosed sum in 9X Media in 2007 and took over its reins in 2011. The company had its share of troubles in the initial days. It was founded by former chief executive of Star India Peter Mukerjea and his wife Indrani Mukerjea in 2007, who left their management roles in the company in 2009.

In 2010, INX Media renamed itself 9X Media as part of a restructuring. The profit-making firm now runs five music channels.

“There are aspects of media that can make scalability challenging. 9X is a turnaround story that has reverted to profitability over the last few years. Our plan was to achieve sustainable growth in a profitable manner," said Pandole, adding that the company aims to grow revenue in a profitable manner with a focus on return on investment for shareholders.

Guha, confirming NSR’s exit talks, said 9X Media is exploring ways to expand its music content to include south, north and eastern Indian languages. “We envisage growth from new markets, initiatives like digital platforms and subscription revenues," he said.

Shantanu Nalavadi, partner, NSR, said 9X will continue to focus on music as its differentiator, adding that its revenue is growing at 30-35% annually.

“Having established leadership as a leading music broadcaster, we are now looking at other platforms where music is consumed especially digital, which would mean that our content would increasingly be available though Internet, mobile phone applications," said Nalavadi.

A media-focused investment banker said domestic investors continue to be bullish on the media sector.

“There are foreign direct investment restrictions in broadcast media for foreign investors but there are a few, large, corporates that continue to be strongly interested in media, both newspapers and channels," he said, declining to be identified as media firms constitute a large part of his firm’s clientele.

India allows 100% foreign direct investment (FDI) in non-news media and limits FDI in newspapers and news magazines, radio and television news channels at 26%. The Telecom Regulatory Authority of India recently proposed increasing the FDI limit in news television and private FM radio broadcasting to 49%.

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