Anil Ambani shedding stake in media

Looking to monetise assets not in Reliance Capital's core area of business

Big brother Mukesh Ambani made his  big entry into the media, entertainment and internet world through his acquisition of Network18 Media Investments Ltd a few months earlier. Younger brother Anil Ambani has decided to go the other way.

Reliance Capital (R-Cap), through which the group has made investments in the media, entertainment and internet space, is slowly but substantially reducing its exposure in companies in this arena, through a series of sell-offs.

The move is part of R-Cap’s decision to monetise assets which are not in their core area of business, as part of a restructuring exercise. For instance, it had invested in TV Today Network Ltd a publicly listed company promoted by Aroon Purie, which controls TV channels Aaj Tak and  Headlines Today. This was a little over seven  years ago and it had a peak equity exposure of around 14.9 per cent. In recent months, it has slowly reduced its stake, the latest being in the first week of this month, when it   offloaded nearly 4,80,000 shares for Rs 7.38 crore in the open market. With this, R-Cap’s  stake in the company has fallen to five per cent.

Those in the know say the company has profited from this exposure, which once had people thinking it could mark the junior Ambani’s  entry into the media business. The Ambanis  did not ask for any board membership.  But  riding on the success of news broadcasting as a business, analysts say R-Cap has almost doubled its initial investment in the company.

The group might be negotiating with Inox Leisure, a publicly listed company, among  others, for a merger in the exhibition business run through Big Cinemas. However,  it has also slowly reduced  its  stake in Inox from as much as 14 per cent to only 4.5 per cent currently.

R-Cap also has a substantial investment in yatra.com, the travel portal which has now come under the control of Mukesh Ambani, thanks to the acquisition of Network18.

The junior Ambani  controls around 16 per cent. An R-Cap spokesperson declined to comment on the divestment  strategy. The long-term plan, say sources, is that even here the company will slowly reduce its exposure.

Experts say that based on valuations of makemytrip.com, the number one site in this area, the company’s valuation could be at $500–600 million.

The only investment in media which it wants to still keep intact is in Bloomberg TV India, which runs a business channel. R-Cap took around 18 per cent in the company four  years earlier and analysts say it will stay for a while before it makes any move.

TUNING OUT

• By reducing its exposure in the media, entertainment  and internet spaces, Reliance Capital wants to monetise assets not in its core area of business, as part of a restructuring exercise
• The only investment in media it wants to keep intact is in Bloomberg TV India, which runs a business channel
• R-Cap took 18% in the firm four years ago. Analysts say it will stay for a while before it makes any move