With Nai Dunia in the bag, Jagran is #1 print group

03 Apr,2012

 

By Archita Wagle

 

There was no press conference announcing the deal. The Kanpur-based Jagran Prakashan Limited (JPL) simply did it by notifying the stock exchanges. The acquisition of Nai Dunia was done via Suvi Info Management (Indore) Private Limited which in turn owns Naidunia Media. It was an all-cash deal.

 

What it does for the Jagran group is significant as its hold on the Hindi belt becificant, a factor that could help strike better contracts with advertisers. In fact, as an analysis with IRS 2011 Round 4 numbers shows, the Nai Dunia acquisition has helped JPL become the numero uno print media group in the country (see accompanying story: Saala Jagran No 1 print media group ban gaya…)

 

 

Announcements of the deal on the front pages of Nai Dunia (left) and Dainik Jagran (right)

According to an analyst from a domestic brokerage firm, this deal makes sense to JPL as the enterprise value assigned to Nai Dunia is Rs2.25 billion and had JPL planned a greenfield expansion in MPC, the total cost could have run into at least Rs3 billion.

 

In an email interaction with MxMIndia, Mr Amit Jaiswal, Company Secretary, JPL clarified that JPL has acquired only Nai Dunia. NewsX and Webdunia are not a part of the deal. Talking about the changes after the deal he said: “Mr Vinay Chhajlani will continue as Advisor to Board. His vast experience of print and knowledge about the market will be quite useful for us. We will add some new members to the team at senior level in sales, marketing and editorial. Our corporate brand team will help in branding and communication. As far as the staff, the erstwhile promoters have already rationalized the staff strength to a large extent.”

 

Commenting on the acquisition in a communique, Mr Mahendra Mohan Gupta, Chairman and Managing Director of Jagran said, “This was a logical market expansion for us and enables us to strengthen our presence in Central India. Nai Dunia is a newspaper with a very strong team and has demonstrated editorial excellence over the last decade.”

 

Nai Dunia is the flagship publication of Naidunia Media Limited, which was launched June 5, 1947. Nai Dunia features amongst the top 10 Hindi dailies of India and has multiple editions in MP and Chhattisgarh and is the third largest read newspaper in Madhya Pradesh and the fourth largest read newspaper in Chhattisgarh (IRS Q4 2011). According to a Jagran communique, Nai Dunia’s current circulation base is around half a million copies per day with the readership growing 2.6 times over the last five years.

 

The industry is almost unanimous in saying that the deal is windfall for both the parties involved, especially JPL, which can now enter the Madhya Pradesh-Chattisgarh (MPC) market. JPPL, controlled by GD Gupta family publishes the Jagran editions in Bhopal and Rewa in Madhya Pradesh and JPL, promoted by the PC Gupta family, has been barred from using Dainik Jagran banner in MP as it has been in litigation since 2007. But with the Nai Dunia acquisition, the other option for JPL, they are entering the MPC market with an established newspaper, which is the second largest newspaper in terms of readership and business volumes in MPC.

 

“JPL will benefit in terms of circulation and readership as it gets two new territories, Madhya Pradesh and Chattisgarh, with the acquisition of an established and well-known newspaper. JPL couldn’t enter Madhya Pradesh as per the agreement in the family, but now taking over Nai Dunia has opened the MP market for them,” said Mr Vijaydutt Shridhar, senior MP-based journalist and ex-editor of Navbharat.

 

Mr Abhishek Karnani, Director, Free Press Journal which also has an edition in Indore, echoed Mr Shridhar’s sentiments: “The takeover deal is a windfall for both, JPL and Nai Dunia. Entering the MPC market was the next logical move for JPL. Initially the market had only Dainik Bhaskar and Nai Dunia but several local new publications with strong backing were launched in the market. Nai Dunia made a smart move in selling out rather than being marginalised in the market.”

 

Says Mr Sundeep Nagpal of leading media consulting firm Stratagem, “This is in line with what other leading groups have done – like the Times of India group did with Vijaya Karanataka.” According to Mr Nagpal, the acquisition is a win-win for all parties involved.

 

“With Nai Dunia’s acquisition, JPL has gained foothold in an important and growing market for Hindi publications. Nai Dunia never grew much beyond Indore, though they had launched editions in other cities. But with an aggressive player like JPL taking over we can expect to see Nai Dunia growing in other centres too. JPL has now entered Dainik Bhaskar’s territory. We can now expect a good fight,” said Mr Janardhan Pandey, associate VP, DDB Mudra.

 

Stockmarket analysts though are a little cautious about this face-off as they believe that DB Corp will not be impacted because of the entry of JPL from a short to medium term perspective. But they say that Patrika would be impacted as Jagran would become aggressive to win back the No. 2 slot in MPC. The analysts also feel that the price paid (net of tax benefits) is inexpensive and should derive benefits in the medium to long-term.

 

For the cash-rich Jagran group, the Nai Dunia acquisition follows that of Mid-Day two years ago and the management plans that Nai Dunia will be consolidated once a year just like Mid-Day.


Saala Jagran No 1 print media group ban gaya…

By A Correspondent

 

Question: Until last fiscal, which was the largest print publishing house in the country?

Answer: No, the answer is not Dainik Jagran. It’s Dainik Bhaskar, In fact, Jagran was at No 3 until two days ago, just behind the BCCL group. But with the buyout of the Nai Dunia group, Jagran now becomes the largest print media group in the country. Check tables below:

 

 

 

Note: MRUC does not share detailed IRS numbers with the media. Given that we had adequate time for the confirmation of the Nai Dunia buy, we collected the information from what MRUC shared with us and from respective media entities.

 

 

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