RIL stake-buy in Eros boosts stocks

Shares of Reliance Industries and Eros International Media advanced by 0.66% and 7.87% respectively, at 9:18 IST on BSE, after Reliance Industries agreed to subscribe to a 5% equity stake in Eros International Plc at $15 per share.

The announcement was made after market hours yesterday, 20 February 2018.

Reliance Industries (up 0.66% at Rs 925.50) and Eros International Media (up 7.87% at Rs 213.25) advanced.

Meanwhile, the S&P BSE Sensex was up 151.08 points or 0.45% at 33,854.67.

Reliance Industries (RIL) and Eros International PLC (Eros) announced on 20 February 2018 that RIL, through a subsidiary, has agreed to subscribe to a 5% equity stake in NYSE listed Eros at a price of $15 per share, which represents an 18% premium to last closing price. The transaction is subject to customary regulatory and other approvals.

Furthermore, RIL and Eros International Media (Eros India) announced that they have agreed to partner in India to jointly produce and consolidate content from across India. The parties will equally invest up to Rs 1000 crore in aggregate (approximately $150 million) to produce and acquire Indian films and digital originals across all languages.

In addition, it was announced that Jyoti Deshpande, Group CEO and MD of Eros will be stepping down from her Executive role after more than 17 years in Eros and move on to head the Media and Entertainment business at RIL as President of the Chairman's Office. Deshpande will start her role at RIL from April 2018, but will continue to remain as a Non-Executive Director on the Board of Eros. Kishore Lulla will resume his position of Group Chairman and CEO of Eros.

In her new role at RIL, Deshpande will lead the company's initiatives in Media and Entertainment to organically build and grow businesses around the content ecosystem such as broadcasting, films, sports, music, digital, gaming, animation etc., as well as integrate RIL's existing media investments such as Viacom and Balaji Telefilms with a view to build, scale and consolidate the fragmented $20 billion Indian M&E sector.

Eros International Media is a leading global company in the Indian film entertainment industry that acquires, co-produces and distributes Indian films across all available formats such as cinema, television and digital new media.

On a consolidated basis, the company's net profit fell 29.8% to Rs 67.16 crore on 41.7% decline in net sales to Rs 193.51 crore in Q3 December 2017 over Q3 December 2016.

RIL is India's largest private sector company. The company's activities span hydrocarbon exploration and production, petroleum refining and marketing, petrochemicals, retail and 4G digital services.

On a consolidated basis, RIL's net profit rose 25.5% to Rs 9445 crore on 25.7% growth in net sales to Rs 99810 crore in Q3 December 2017 over Q3 December 2016.

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