MUMBAI: Cellcast Interactive India and Network18 Media & Investment?s publishing business have got FIPB approval.

Cellcast has got the nod to set-up three Non-news and current affairs Television channels in Hindi, Tamil and TamilTamilu in India while Network 18?s publishing unit has got the permission to undertake additional business of publishing through court approval amalgamation.

Incidentally, the Foreign Investment Promotion Board had last month put the FDI proposal of both companies on hold.

The government has approved 22 FDI proposals worth Rs 5.86 billion.

Earlier Cellcast Asia Holdings Mauritius, which owns the India outfit, had raised $9.5 million from Vertex, a wholly-owned subsidiary of Temasek Holdings, while Canaan Partners had pumped in $5.25 million.

Cellcast Interactive India had launched a social TV channel MyTV, which is ad free but allows brand integration into the content.

The government also cleared Bangla Entertainment?s proposal to amend activities from ?Bengali language television channel? to ?non-news and current affairs television channels?.

Bangla Entertainment operates Channel 8 which was acquired by Sony Pictures Asia in 2009 and was renamed as Sony Aath.

MUMBAI: Clouded with a steep valuation over the acquisition of Eenadu TV?s partial assets, the rescue act of Mukesh Ambani has failed to considerably enthuse investors after the Raghav Bahl-promoted Network18 Media and TV18 Broadcast got a first-day lift following the announcement of the deal.

The positives in the form of cleaning up debt, getting the backing of India?s leading business house Reliance Industries Ltd (RIL) and possible gains in subscription revenues with the inclusion of regional broadcasting firm ETV were negated by the lack of disclosure in how much indirect stake RIL will have in the listed entities and what terms the OCDs (Optionally Convertible Debentures) would have.

The lack of interest and somewhat rejection from shareholders and investors is evident from the fact that in the last two days, shares of TV18 fell over 8.6 per cent, after breaching the upper circuit on 3 January.

Network18 scrip, which touched a high of Rs 55.5 per share on 4 January, has come down to Rs 49.7 per share on the last closing day at the BSE.

Financial analysts told Indiantelevision.com that the jump was an aberration and in the short term, the stock may start to drag.

In the first two days (3, 4 January), the stock price of Network18 and TV18 companies had gone up 37 per cent and 30 per cent respectively, before the reality sunk in and the scrips started falling on Thursday.

As of Friday, TV18 scrip closed at Rs 30.80, while Network18 closed at Rs 49.70. Incidentally, the rights issue price of TV18, which is to be not more than Rs 40 per equity share and Network18 (not more than Rs 60 per equity share), is more than the current stock price.

The market cap of minority shareholders of the two companies ? TV18 and Network18 - is Rs around 8.3 billion (as of 4 January?s closing price). This provides a disincentive to them to subscribe to the rights issues of the two entities where they will have to possibly cough out Rs 23 billion.

?If the minority shareholders do not subscribe to the rights issues of the two companies, the promoter stake will be pretty high. We could even see a delisting if the promoter holding goes up to very high levels,? said a media analyst at a local broking firm who did not want his name to be revealed.

A different perspective, not widely accepted, was offered by a stock broker. "The best time to collect the shares of TV18 and Network18 would be to wait till their financial performance improves. Also, a good time could be when the rights issue is on the way so that the trend would be captured," he said.

The other media stocks also rose briefly due to the immediate impact of the deal. Almost all listed media entities saw a northward trend in their stock price on the day when the deal was announced (3 January).

Among the players in the news business, TV Today Network closed 16.36 per cent higher on 3 January compared to its previous close. Other players like NDTV (14.29 per cent) and Zee News (5.64 per cent) also closed on a high.

Shares of Sun TV (2.51 per cent), UTV Software Communications (1.2 per cent), Zee Entertainment Enterprises Ltd (0.9 per cent), and Reliance Broadcast Network (0.1 per cent) marginally jumped.

"The media industry has its own set of challenges. Media stocks momentarily went up because of Mukesh Ambani making his big bang entry into the media sector. That euphoria has died down. The sector has to focus on profitability before it regains its old valuations," a market analyst said.

Also Read:

Demystifying the Reliance-TV18-ETV deal

Mukesh Ambani?s big media bet

Mukesh Ambani forays into media via TV18

TV18 to snap up ETV, plans rights issue

Reliance Industries in deal with TV18 Group?