Aditya Birla Group acquires stake in Living Media India

The Aditya Birla Group on Friday announced it had acquired 27.5 per cent stake in the Aroon Purie-controlled Living Media India, marking an entry into the media business.

Living Media acts as a holding company and also owns 57.46 per cent in TV Today Network, the listed company that controls the group's broadcasting assets such as Aaj Tak and Headlines Today, besides publishing a host of magazines that include the flagship India Today. Thomson Press, through which Purie started his business, is a separate entity.

According to industry sources, the company has been valued between Rs 1,300 crore (Rs 13 billion) and Rs 1,400 crore (Rs 14 billion). The Birlas have forked out nearly Rs 350 crore to buy the stake. The company has some debt on its books.

"The media sector is a sunrise sector from an investment point of view. I believe that Living Media India offers one of the best opportunities for growth and value creation," said Kumar Mangalam Birla, Chairman, Aditya Birla Group.

The Birlas have earlier forayed only in the entertainment business and in 2003 launched a movie and television software production company called Applause Entertainment, best known for producing Hindi movie Black, starring Amitabh Bachchan.

However, the company was closed in 2009.

Aroon Purie, chairman of the India Today Group, said, "I am delighted to partner with the Aditya Birla Group to aggressively address the current and future potential of the Indian media business, which is at a tipping point. The Aditya Birla Group with its strong leadership, global footprint, diversified business interests and its shared values of integrity, commitment and social responsibility is a perfect fit with the India Today Group."

Ambit Capital is understood to have been the advisor for Living Media. According to sources familiar with the deal, other companies that had shown interest in picking up stake were Mahindra & Mahindra and the Kolkata-based RP-Sanjiv Goenka Group.

The deal is reflective of a growing trend of large corporate and industrial houses making a foray in the media business, leading to consolidation in the industry. Just five months ago, Reliance Industries invested in the Network18 Group in a multi-layered deal. Anil Ambani is also believed to have invested in Bloomberg UTV, the business news channel.

The Delhi-based Abhey Oswal promoted Oswal Greentech also picked up 14.2 per cent stake in NDTV for Rs 24.24 crore (Rs 242 million).

Purie's publishing empire, controlled through Living Media, also includes Business Today and a clutch of licensed magazines such as Cosmopolitan, Good Housekeeping, Men's Health, Harper's Bazaar, Travel Plus and Harvard Business Review, among others.

Living Media also has a joint venture with German media house, Axel Springer AG, for an auto magazine and an online shopping portal: Bag it today. It also has a joint venture with the UK-based Daily Mail for the daily tabloid Mail Today. And, also another JV with Harper Collins.

TV Today has four news channels - Headlines Today, Aaj Tak, Tez and Delhi Aaj Tak - and radio stations under the brand Oye FM. In the March quarter, TV Today posted a profit of Rs 7.33 crore (Rs 73 million), with revenue of Rs 88.36 crore (Rs 883 million).

As of March 2012, it had debt of Rs 23.76 crore (Rs 238 million). The company has a market capitalisation of Rs 321.08 crore (Rs 3.21 billion). Aaj Tak, based on TAM ratings for the week ended May 5, was the leader in the Hindi news category with a market share of 17.4 per cent. Its nearest competitor India TV had 16.4 per cent.

Living Media owns around 57.46 per cent in TV Today while the Anil Ambani promoted-Reliance Capital owns 13.62 per #162 LIC has 3.61 per #162 Tata Mutual fund has 1.05 per cent and Ramesh Damani has 1.36 per cent. The TV Today scrip on Friday closed at Rs 54, up 0.84 per cent, on the Bombay Stock Exchange.