Bennett, Coleman and Company (BCCL), the media conglomerate that owns The Times of India newspaper, along with several other entities across the print and electronic media, may go public to increase its television and internet business, a group promoter told The New Yorker.
“In the long run, we might go public and use the funds to acquire TV stations,” said BCCL Managing Director Vineet Jain. “We don’t need the money to grow publishing, but we need it to grow television and internet,” Jain was quoted as saying.
Responding to an email seeking comments, Satyan Gajwani, chief executive of Times Internet, said, “There is no such plan at the moment.” An email sent to Ravi Dhariwal, chief executive (publishing), BCCL, did not elicit any response.
The New Yorker profile, titled Citizens Jain, a take on Citizen Kane, a 1941 Hollywood classic on media baron William Randolph Hearst, offered a glimpse into the financials of the privately-held behemoth. The article also analyses the Times Group’s innovative business model which involves advertorial supplements, ad-for-equity deals and aggressive ad sales. “Sameer and Vineet Jain make no pretense that what they do is a public calling. Rather than worry about editorial independence and the wall between the news room and the sales department, they propose that one secret to a thriving newspaper business lies in dismantling that wall,” the article read.
In its annual report for the year ended March 2011, BCCL had stated on a standalone basis, its revenue was Rs 4,004 crore, while the turnover under the media and real estate segments was Rs 4,469 crore. The report in The New Yorker stated the group's annual revenue was about $1.5 billion (about Rs 8,000 crore).
“The pre-tax profit margin of BCCL’s newspapers is a remarkable 25 to 30 per cent. The company commands half of all English language print advertising…a third of TV news channel ads and almost a quarter of all radio and web ads,” the article stated, adding, “The company has no debt.”
In comparison, the Subash Chandra-promoted Zee Entertainment recorded revenue of Rs 2,204 crore and a net profit of Rs 489 crore in 2011-12. Its market capitalisation stood at Rs 18,700 crore, a valuation of about 8.5 times the revenue. If BCCL gets such a multiple in the stock market, it could be valued at Rs 70,000 crore, and a 10 per cent stake sale would fetch Rs 7,000 crore. Only a handful of private companies, such as DLF, Reliance Power and Tata Consultancy Services, have raised more than Rs 5,000 crore through initial public offerings in the Indian market.
BCCL’s group company Entertainment Network (India), which operates the radio business, has market cap of Rs 1,136 crore. Analysts say the profiling by the magazine, whose readership is largely based in the US, suggests the public issue could be at an exchange that values internet and new media businesses better.
According to Sans serif, a blog that tracks media developments, "The New Yorker profile provides sufficient indication the Times Group is poised for its long-promised initial public offering, probably on NASDAQ."