FDI’s 26% allowance: Are radio players happy?

05 Oct,2011

By Shubhangi Mehta

 

The government has enhanced the foreign investment limit for FM radio to 26 percent from the earlier 20 percent.

 

This change ensures conformity of the foreign investment limit with other similar activities in the Information and Broadcasting sector.

 

Rana Barua

Is the increase adequate or was there more that was expected?

Mr Rana Barua, Chief Operating Officer at RED 93.5FM, put forth his views by stating,” it’s a positive sign for sure for the industry .

Whether Red Fm is looking at upping the Astro stake, Mr Barua said, “We will try and look at that but this will all depend on internal decisions hence there is not much to be said on this as of now”.

 

 

 

 

 

 

 

“It is a welcome change but we will be able to gauge its real value closer to the bidding date of phase3 when migration policy is clear.  While radio in india is possibly one of the highest CAGR media in the world, the global economic situation needs to be accounted for in order to ascertain foreign investment’ interest,” said Mr Vineet Singh Hukmani, MD, Radio One.

 

Apurva Purohit

 

 

On this Ms Apurva Purohit, CEO, Radio City 91.1 FM said,”The increase in FDI in Radio sector from 20 to 26 percent is not really going to make any dramatic impact on the industry. It is too less and even now not on par with other media like TV or DTH.”

 

 

 

 

 

 

 

 

 

Prashant Panday

 

Mr Prashant Panday,CEO,Radio

Mirchi, remarked, “A higher FDI limit will help FIIs to trade more in radio stocks that are listed. Till now, the limit was 20 percent and when FIIs approached that number, they had to take special permission from RBI to buy more. Now that limit has been raised to 26 percent and that will help increase volumes on listed radio stocks.”

 

 

 

 

 

 

 

Will this encourage more foreign players to invest in the market?

On this Mr Panday said,” Whether it will have any impact on strategic investments from foreign companies in India or not remains to be seen. On the one hand, the radio sector in India offers tremendous growth opportunities. But on the other hand, the sector’s profitability has been in question for much of the last five years. Even going forward, if bidding in Phase-3 becomes unreasonable, profitability could be in serious jeopardy. Further, foreign ncompanies are themselves operating under uncertain conditions in their own markets. Whether they will be willing to invest in India at this point in time remains to be seen.Also, given the condition of the money markets in India right now, it is unlikely that fund raising will be very easy. Given all of this, I think FDI investments into the radio sector in India will be limited.

 

Mr Barua on the same said,” I’m still not sure if the rise will encourage new players to enter the market. The rise is there but when it comes to analysing it, I have always encouraged a higher percentage. In my opinion this rise is not high enough and leaves us with a doubt if it will actually egg on more foreign players”.

Post a Comment 

One response to “FDI’s 26% allowance: Are radio players happy?”

  1. Shridhar Rao says:

    Why is FM restricted state wise & not national, i.e 98.3 of Bangalore cannot be listened in chennai or Andhra & like wise, why cant I enjoy the music in other states

Today's Top Stories
Videos