Independent News & Media freshly signs Jagran Prakashan

Televisionpoint.com Team
The Irish media group Independent News and Media has signed a fresh agreement with Jagran Prakashan Ltd, publisher of the Hindi daily Dainik Jagran to lock in 75 per cent of its stake in the latter company for a three-year period. The earlier lock-in period for the Independent Group's 26 per cent was for one year, and it had the option of exiting at the time of the IPO.

In June this year, the Independent Group had picked up 26 per cent of the pre-issue Jagran equity for RS 150 crore. As part of the company's IPO strategy, the lead managers had proposed that Independent Group dilute part of its holding. However, the latter has turned down the proposal, Jagran's CMD M M Gupta said.

Meanwhile, there is a move to merge the sister television company, Jagran TV, (that owns the news channel 'Channel 7') with Jagran Prakashan. The latter is currently a 100 per cent print media group. This would enhance the valuation of Jagran Prakashan, and the CFO of the group, R K Aggarwal, said this was a possibility post-issue. Jagran TV was launched about a year ago by the same promoters, the Gupta family, but is independent of the print media company.

"The new daily will be a countervailing brand in some Hindi-speaking markets where we expect competition to throw up a challenge. Many advertisers cannot afford the Jagran rates anymore, Rather than lose this money to competition, we can offer an alternative, cheaper brand to both readers and advertisers." Gupta said.

Jagran Prakashan Ltd has filed the filed the draft red herring prospectus with the Securities and Exchange Board of India for a public issue of up to 11.5 million shares of RS 10 each through a 100 per cent book-building route. The company expects to net around RS 500 crore. The bulk of the IPO proceeds to the tune of RS 137 crore will be ploughed into modernisation and purchase of new printing, while RS 80 crore has been set aside for new acquisitions and partnerships.