India outperformed most developed economies in FY 2016-17 to register a GDP growth of7.1%. As a result it has become one of the world's fastest growing major economies drivenby robust policy initiatives as well as a focus on all-round development.With areforms-focused government at the helm the country is marching ahead in the rightdirection however implementation needs to pick up to bridge the gap between expectationsand delivery.
Supported by strong economic fundamentals we as a country are on the cusp of reachingdouble digit growth levels which will drive discretionary spends and therefore media andentertainment spends in the country. India has one of the lowest per capita advertisementspends and media consumption in the world and thus it offers a huge potential for growthfor many years to come. Having seen various phases of growth media consumption habits ofIndian consumers and proliferation of new media platforms we believe that all mediaplatforms are poised to grow and it is unlikely that any platform will come under threatfrom another at least in our country. In fact they complement each other and willcontinue to do so in foreseeable future given the low penetration of each medium.
The country's M&E industry is currently expected to grow at a CAGR of 14.3% to Rs.2260 billion by 2020 with advertising revenues expected to surge at 15.9% CAGR to Rs. 994billion. Radio as a segment is projected to grow fastest at over 16% CAGR. This growth isdriven by both volume enhancements in tier-II and tier-Ill cities and an overall increasein advertisement rates. Besides the announcement of the rise in foreign direct investment(FDI) cap for FM radio is expected to bene3t the industry further.
We are very pleased to inform you that our initial public offering (IPO) in FY 2016-17was a resounding
WE ARE VERY PLEASED TO INFORM YOU THAT OUR INITIAL PUBLIC OFFERING 3IPO3 IN FY 2016317WAS A RESOUNDING SUCCESS WITH A SUBSCRIPTION OF OVER 40 TIMES. WE RAISED Rs. 400 CRORESWITH THE PRIMARY ISSUANCE. WE ARE GRATEFUL TO OUR SHAREHOLDERS FOR REPOSING THEIR PRECIOUSTRUST IN OUR BUSINESS MODEL.
success with a subscription of over 40 times. We raised Rs. 400 crores with the primaryissuance. We are grateful to our shareholders for reposing their precious trust in ourbusiness model. This con3dence places a huge responsibility on us to remain focused onour vision strategy and growth and to deliver the best value to our shareholders.
During 2016-17 we reported a very satisfactory performance despite a muted secondhalf owing to demonetisation. We registered a revenue of Rs. 271.4 crores in 2016-17compared to Rs. 225.5 crores in 2015-16 an overall rise by 20.4 percent. As a result ourEBIDTA increased to Rs. 91.3 crores in 2016-17 against Rs. 78.1 crores in 2015-16. Our netpro3t stood at Rs. 36.7 crores in 2016-17 against Rs. 27.6 crores in 2015-16 an increaseby 32.7 percent.
Our focus on efficient reach for our advertisers and relevance across markets for ourconsumers has helped in delivering better than industry growth year-on-year both in volumeand in value. We continue to consolidate our leadership across all our key markets andincrease our engagement with advertisers.
Today we have 39 stations including 11 new Radio City stations acquired in Phase-IIIand 8 stations from Radio Mantra taken over under the scheme of arrangement. All ourPhase-II Radio City stations have been migrated to Phase-III. The new radio stationsacquired in Phase-III are now fully operationalised. Radio Mantra stations have since beenrebranded to Radio City. These 39 stations in tier-I tier-II and tier-III cities allow usover 62 percent coverage of the new Phase-III FM footprint; and as all these stations arelocated in high advertiser potential markets we provide an optimum and efficient reach toboth national and regional advertisers (Source: IRS Q4 2012 Census 2011 & Radio CityExtrapolation).
We believe our understanding of audience preferences and a research-based approachenables us to customise content to suit the preferences of each city's local audiences.Based on the recall statistics from third-party research agency AZ Research we have beenranked No.1 in these markets - Mumbai Pune Ahmednagar Bangalore Baroda Surat JaipurDelhi Lucknow Ranchi Varanasi Gorakhpur Hisar and Karnal (Source: AZ Research TG12+ Period - March 17 Weekly Recall). We recently revamped our digital interface with thelaunch of www.radiocity.in. Listeners now will be able to enjoy select terrestrial showsalong with exclusive digital content. We play 42 Radio stations in 8 languages and 300+playlists have generated a listenership of 32 million (Source: Lasopi & PurpleStream).
Our in-house creative solutions team named AudaCity' provides bespoke advertisingsolutions on ground on air and digital media to address the needs of our advertisers.This supports our network sales team to service our advertisers better.
LEADERS OF RADIO CITY
At Radio City we believe we have created operational excellence through an inordinateemphasis on processes research and best-in-class people practices . Our people focus hasensured that we are one of the best places to work at across industries and the employerof choice in the media industry.
The result is a dynamic and consistent team that nurtures a culture of innovation isfocussed on excellence and a spirit of camaraderie. This experienced team has a trackrecord of delivering consistent performance in the radio industry and across variousstages of a business life cycle.
During FY 2016-17 we focused on enhancing the skill sets of our employees throughvarious external and internal training sessions. We also run the Radio City School ofBroadcasting through which we conduct training programmes to train individuals and developtalent to work in the radio industry.
We are helping build an empowered society through educational and vocational trainingto help children associated with orphanages and blind schools gain sustainable employment.In FY 2016-17 we contributed Rs. 7.95 million towards our CSR activities primarily inthe form of financial aid to organisations such as Happy Home and School for the BlindZion Social Welfare Society.
The radio industry is poised to grow consistently driven by the commencement of manynew radio stations growing listenership across tier-II and tier-III cities and anoverall increase in advertisement rates. We intend to capitalise on the growthopportunities in the radio industry through leveraging our expertise and leadershipposition while expanding to tier-II and tier-III cities. We believe that our expertise indeveloping local content
WE BELIEVE OUR UNDERSTANDING OF AUDIENCE PREFERENCES AND A RESEARCH3BASED APPROACHENABLES US TO CUSTOMISE CONTENT TO SUIT THE PREFERENCES OF EACH CITY'S LOCAL AUDIENCES.BASED ON THE RECALL STATISTICS FROM THIRD3 PARTY RESEARCH AGENCY AZ RESEARCH WE HAVE BEENRANKED NO.1 IN THESE MARKETS 3 MUMBAI PUNE AHMEDNAGAR BANGALORE BARODA SURAT JAIPURDELHI LUCKNOW RANCHI VARANASI GORAKHPUR HISAR AND
KARNAL. (Source: AZ Research TG 12+ Period - March 17 Weekly Recall)
will consistently open new growth opportunities for us. We also intend to expand ourdigital presence where we have been pioneers since 2008 since we believe it is yet anotheropportunity to engage with our audiences and further the equity of brand Radio City.
Before I conclude I would like to thank our advertisers employees shareholdersgovernment and bankers; all of whom have been critical for our growth story and believethat the Company will continue to deliver as per expectations and live up to the trustreposed in it.