Jagran Prakashan to raise Rs 1.5 bn to retire short-term debt

MUMBAI: Jagran Prakashan Ltd (JPL), the company that publishes Hindi language newspaper Dainik Jagran, has decided to raise Rs 1.5 billion through issue of non-convertible debentures (NCDs).

The company says that the funds will be utilised to augment its long term resources and retire its high interest bearing short-term debt.

Jagran Prakashan?s board of directors on 1 December approved issue of secured NCDs up to an aggregate value of Rs 1.5 billion, which are rated AA+/Stable by ratings agency CRISIL.

JPL is India?s leading media and communications group with interests spanning across Print, OOH, Activations, Mobile and Online, covering all of India as its footprint.

The company?s newspaper operations include nine newspaper titles in five different languages including Hindi daily Dainik Jagran, Punjabi daily Punjabi Jagran, daily bi-lingual newspaper i-next and English weekly tabloid City Plus.

Earlier, JPL had snapped up NaiDunia Media for an enterprise value of Rs 2.25 billion in an all-cash deal that bolstered Jagran?s presence in central India. The company publishes NaiDunia, which has a presence across Madhya Pradesh, Chhattisgarh, and Delhi-NCR.

In 2010, the company had acquired majority stake in Mid-Day Multimedia for Rs 2 billion. The acquisition gave JPL a foot-hold in English, Gujarati and Urdu newspaper market with the addition of English tabloid MiD-Day, Guajarati tabloid Mid-Day Gujarati, and Urdu daily Inquilab.

US private equity firm Blackstone invested $50 million in Jagran Media Network (JMN), the parent company of JPL, in 2011.

In its ratings commentary, CRISIL said JPL?s ratings continue to reflect its strong market position, healthy operating efficiencies, and strong financial risk profile. These rating strengths are partially offset by the company?s susceptibility to potential competition and to significant volatility in newsprint prices impacting its operating margin.

Dainik Jagran, with readership of 56.4 million, had advertisement revenues of Rs 8.5 billion in 2011-12.

"Furthermore, the acquisition of Naidunia Media Ltd (NML) has strengthened JPL?s business risk profile. The leadership position and strong brand image of Dainik Jagran leads to stable revenues, along with increasing contribution from advertising revenues, and healthy profitability," the ratings agency said.

IN FY 2012, JPL reported an operating income and a profit after tax (PAT) of Rs 13.55 billion and Rs 1.78 billion respectively on a consolidated basis against an operating income of Rs.12.21 billion and a PAT of Rs.2.07 billion for the previous year.

For the first six months of 2012-13, JPL reported an operating income of Rs 6.4 billion (Rs 6.1 billion) and PAT of Rs.1.25 billion (Rs.0.95 billion), on a standalone basis.

JPL also has healthy financial flexibility, driven by liquid surplus of about Rs 1.9 billion as on 30 September.