Investors see great potential in Indian media
By Leah McBride Mensching, Monday 4 August 2008 at 18:45 :: Competition :: #2038 :: rss
Investors are interested in media companies in India because they continue to trade at high premiums, target under-advertised and geographically diversified audiences and serve audiences willing to pay for media, Salil Pitale, head of media and telecom at Enam Securities, told the Future of News event in New Delhi Friday, afaqs! reported.
Criteria for investing in Indian media falls into four major categories: predictability, sustainability, profitability and derisking, he said.
There are about 60,000 newspapers and 70 news channels in India, with valuations of listed companies between Rs 35,000 to Rs 40,000 (excluding the largest, such as the Times of India and STAR India, which are not listed), afaqs! reported Monday.
Because India is a so-called under-advertised country, investors see opportunities to fill advertising gaps, Pitale told the audience.
“The media is yet to reach out to the entire potential target of local advertising. That is an interesting opportunity, which investors look at,” he said, according to afaqs!.
Investors in India believe audiences are paying to consume media, which is another reason to invest, he said.
“The total amount of subscription revenue on television in India is (US)$5 billion, which is two-and-a-half times than the ad spends. There could be a dichotomy that this $5 billion doesn’t come back to the broadcasters,” Pitale said, according to afaqs!.
Additionally, because Indian audiences are very diverse, based on geographic location, many places aren't reached by a variety of dominant media. This is a huge opportunity for many investors, he said.
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