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NDTV PLANS IPO
After TV-18, it is now Prannoy Roy-controlled
NDTV's turn to jump onto to the initial public offering
(IPO) bandwagon. The New Delhi-based TV software house
is drawing up a blueprint to go public by the end of
the year or early next year.
Though Roy was not available for comments,
sources in the company admitted that NDTV is working
out the details of the IPO. A senior executive of NDTV
said, "There are two reasons for going public with the
company. Firstly, the company will be needing funds
for expansion as relations with Star Tv are not so hunky-dory.
Secondly, IPO will facilitate retention
of senior employees by giving them employees stock options."
NDTV in recent time has been attempting to restructure
itself and had recently commissioned PwC to undertake
a study of the salary structure in the company. The
recommendations of PwC have left many of the employees
discontended.
According to sources, one of PwC's recommendations
include rationalising incentives and raises annually
to 10, 15 and 20 per cent, respectively for the three
slabs in which employees have been categorised. Until
now, incentives had even gone up to as high as 35 per
cent and in cases where an employee drew a high salary,
the 35 per cent had resulted in substantial gains. If
NDTV formally decides to implement PwC recommendations
then some senior employees may be tempted to leave considering
the scope that lies for them in almost all satellite
channels.
The sources said if NDTV wants to retain
the "best" and the "experienced", as NDTV had been publicising,
then stock options would have to be given for which
going public with the company becomes a must.
Of late, a certain section in the Rupert
Murdoch-promoted Star TV has been questioning the deal
that has been signed with NDTV. "The deal with NDTV
is so one-sided that despite Star spending on Star News,
it is NDTV which walks away with a major portion of
the (financial) gains," a senior executive of Star TV
India said. Reportedly, Star spends about $ 12 million
annually on Star News channel with the deal with NDTV
stating that there would be about 12 per cent hike per
annum due to inflation.
In March 1988, NDTV had signed a five-year
multi-million dollar deal with Star TV to produce news
and current affairs (N&CA) genre of programming for
Star TV, especially the 24-hour news channel Star News.
The agreement, signed when R. Basu was the chief executive
of Star TV India, had ended speculation whether Star
News will continue after March 31, 1998.
Star News was launched early February,
1998 with NDTV exclusively contracted for producing
N&CA programmes for the channel with the prime focus
being on election coverage at that time.
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