India's fourth-ranked advertising agency Mudra Communications has embarked on a major restructuring drive across its businesses.
It has set up an operating board, shut public relations company Horizons with effect from this evening, spun off its Rs 100 crore (Rs 1 billion) operations in south India into Mudra South (to be headed by Mudra executive director R Laxminarayanan) with effect from June, hived off the Rs 550 crore (Rs 5.50 billion) Optimum Media Solutions as a stand-alone media services agency headed by Sandeep Vij with effect from June 1, and merged the Kolkata operation with that in Delhi.
In an attempt to become a total communications group, the Anil Ambani-controlled Mudra, with billings of Rs 780 crore (Rs 7.80 billion), will diversify into around seven other businesses.
It will set up a public affairs company and may venture into film production, though Mudra Managing Director and CEO Madhukar Kamath refuses to go into details on this. The agency is also looking at more revenues through the Mudra Advertising Gallery, an archive on advertising.
Kamath dismissed reports that Mudra's foreign partner DDB an arm of the $7.4 billion Omnicom Group, which holds a 10 per cent stake in the company wants to buy Mudra or pick up a controlling stake in the agency.
"There's been more media speculation on this than truth. We are not selling. The strategy is to make Mudra a complete communications group," he explained.
Executive Director Kaushik Roy pointed out that DDB had only two clients in India, McDonald's and Henkel, and that Mudra handled both.
The restructuring is aimed at focusing on the group and emerging as the most respected communications group in the country.
Kamath said around 90 per cent of Mudra's revenues came from mainstream advertising and that he hoped to see other strategic businesses contributing more than they did.
Kamath explained that Mudra had closed down Horizons after a review of products, people and revenues when he moved in as CEO two months ago. Horizons broke even but did not contribute much to overall revenues, he said.
"We decided to exit practices in which we were not the best," he added.
"The practice of public affairs and environment management requires a different perspective and game plan. We will come back with something after six months."
Employees in the closed units were given three months' compensation and helped to look for jobs.
Kamath explained that Mudra had set up a six-member operating board for the first time. Members will be responsible for particular operations. The board comprises executive directors Roy, Alan D'Souza, Prabir Purkayastha, Laxminarayanan, Dilip Upadhyaya and Kamath himself.
"We had to make a quick transition from a founder, chairman and managing director-driven agency to a team. A great brand has been built in the past 23 years. When our founder-chairman retired we had one leader after another, and had also to build the agency," Kamath said.
The Mudra Group has also set for itself the goal of doubling revenues in the next five years.
A new gambit