British music giant EMI group has pulled out of the RPG Enterprises-controlled Saregama India by offloading its entire 7.71 per cent stake in the open market, marking the end of a century-old relationship.
Gramophone Company of India, Saregama India's earlier avataar, was established as the first overseas Indian branch of the London-based Electrical & Musical Industries Limited (now, EMI) in 1901.
EMI Records, a part of EMI group, sold 720,000 shares of Saregama India, representing a 7.71 per cent stake, on April 5 and April 6.
The Saregama stock was hovering around Rs 100 at that time. Sanjiv Goenka, vice-chairman of Saregama India, confirmed the exit of EMI.
"EMI sold the shares in the open market. We (the promoters) did not buy the shares. EMI was the original promoter but had been associated with the company as a passive investor. It was more of a portfolio investment for EMI," he said.
The British company has also decided to denounce its rights in the ongoing rights issue of Saregama India. The issue is currently open and will close on April 22.
Although the Kolkata-based RPG Enterprises took over Gramophone Company of India in 1985 from EMI, the latter preferred to continue with a token equity partnership in the music company.
The company, which had run into losses, has now turned around and started making profits from April 2004. The profit for the six months period April - September 2004 was Rs 1.92 crore (Rs 19.2. million).
The turnaround was possible after Saregama initiated a conscious strategy to derisk its entire business model.
New initiatives were implemented for exploitation of the company's valuable catalogue through introductions of premium products.
Growing business of home video was brought under focus through tie-ups with new overseas studios while new acquisitions of film music were done selectively either at small cost or on revenue sharing basis.
Saregama, it maybe mentioned, started off on an glorious note.The first recording at Saregama took place a year after it was established as an Indian branch of EMI by recording the voice of the famous dancing star of Calcutta, Gauhar Jan.
In 1910, Gramophone Company applied to register the 'His Master's Voice' picture together with the words "His Master's Voice' as a trademark.
It has recorded the first song in an Indian film, Alam Ara, in 1931. In 1978, Saregama started manufacturing music cassettes in its Dum Dum factory.