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It was a year
of highs for the Indian stock markets and the media sector
also fired up in the later half of the year. Indiantelevision.com
takes you through the major happenings that moved media
scrips in 2003 and looks at the shape of things to come
in the New Year.
- This year the media sector saw two big-ticket public
issues (IPOs) - in September, BAG Films rang the ceremonial
gong at the BSE and the NSE to mark its debut in the markets.
Then, it was TV Today Network that opened to the public
in December and mopped up a whopping Rs 49 billion as
a result of over subscription. There was also a public
issue by Radaan Mediaworks, the Chennai-based television
content company promoted by actress R. Radikaa, which
raised Rs 108.5 million through an IPO offer in January.
- CAS and the resultant litigation was arguably the biggest
uncertainty that marked the media sector. Media scrips
bobbled impulsively in the initial CAS-induced flutter
but later settled down in line with the markets.
- Another defining moment of the year came when the Foreign
Investment Promotion Board (FIPB) capped the limit of
foreign direct investment in television news channels
at 26 per cent. Because of this decision, first it was
Media Content Communications Services (MCCS) India, which
runs Star News, that was pulled into deep controversy
and now it is Raghav Behl's Television Eighteen that is
facing the music. This ever-stretching imbroglio had wide
implications for the media sector and was evident in the
subdued media stocks every time the market buzzed with
yet another report of Star's application being rejected
by the FIPB.
- Then towards the close of the year, the markets witnessed
a broad rally - stocks surged across the board fired by
easy money in the market and high growth rate projections
for the economy coupled with a good monsoon.
- Adding ample fuel to the fire was an unprecedented influx
of foreign funds (FIIs) on the back of strong economic
fundamentals. Healthy corporate fundamentals also had
a positive impact with media majors like Zee cleaning
up their balance sheets in an effort to achieve greater
efficiency and transparency.
- Key indices went free float.
- The Sensex is being pegged as one of the best performing
indices worldwide given its nearly 73 per cent gain over
the year 2003.
- However, it was not all hunky dory. The fiscal year
started with a slump with media scrips losing much ground
after the announcement of the annual budget 2003-04. Media
analysts had indicated that the budget was negative for
the media and entertainment companies.
- Then August was marked by twin blasts in the busiest
business districts of Mumbai followed by a bandh
in close succession.
- Earlier in the year, the cricket World Cup wrecked havoc
on the listed television companies, particularly because
none of them had the rights to telecast the greatest cricketing
spectacle. Consequently, most of the listed companies
had lost a substantial chunk of their market capitalisation
in April.
- This was the year when the market watchdog Sebi cracked
the whip on various scams and nefarious activities on
the markets, in an attempt at cleaning them up.
- Interestingly, the year-end was marked by rumours and
reports in the media about one of corporate India's hungriest
predators, Kolkata-based jute baron Arun Kumar Bajoria
being reportedly on the trail of one of the biggest success
stories in television - Balaji Telefilms. Bajoria is known
to surreptitiously takeover companies.
- Overall, it has been more gain than pain for the media
sector. The sector has seen better overall valuations
in the last two months of 2003. The good news is that
the valuations are likely to improve further as FIIs are
now focusing on the media and entertainment sector due
to its potential for sustaining high growth rates. Nonetheless,
the TV Today IPO, as pointed out earlier, mopped up a
whopping Rs 49 billion as a result of over subscription
even though foreign institutional investors were not allowed
to participate in the initial offer. Moreover, the markets
have been buzzing with the likelihood of NDTV and Sony
making a splash in the market with their own IPOs. According
to market sources, the upswing is likely to continue in
the coming year even if it may not be as fast and high
as in this year.
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