Hi,
Yes the viewership of CNBC channels and also money control app has increased substantially.the new premium feature of money control is also cheap which is fueling that.
Thanks,
Deb
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Yes off course that is the case, I was talking about the rally from last two days. but network18 is in UC from few days. lets see what happen next.
So I was actually thinking and searching this for few days but no luck. Will someone here plz explain me 2 things 1)how the proposed merger going to help Network18 and Tv18?
2) what are the future prospects of this industry going forward? Yes I know it was discussed in this forum but explain to me in a very simple layman language as you will explain to a school boy.
Please.
Thank You 
Hemant Ghai had the advance information about the recommendation to be made on the âstock 20-20â show, co-hosted by him, and that he directly or indirectly used it to his advantage, Sebi said in an interim order.
A careful study of results of last few years will reflect that:
- Operating Margins are in upswing from mid single digit to high teens.
- Company has been able to absorb the acquisition of Viocom 18 successfully.
- Proposed complex merger plan being called off is actually good in the interim for shareholders.
- Obviously some of the initiatives on Digital properties front like premium feature of Moneycontrol is beneficial incrementally
- Scale up of VOOT remains monitorable and may play a key role in future valuation.
Risk remains some ambitious acquisition/ merger by the Promoter group i.e Reliance.
IMHO considering recent results the stock is not that expensive , Promoter group may want to further scale up this and remains one of better plays in Media Sector in our Country
Views invited
Disc: Invested
You will also find another interesting thing. Den is traded at less than cash value on books. Hathaway is 70% cash value. I am amazed at this.
2 Likes
Lack of clarity regarding the competition intensity is main reason and overall landscape in India is still vague when looked in the context of consolidation of global media houses. Media jigsaw puzzle is very unclear as the fate of Zee Entertainment is still hanging.
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Arbitrage Opportunity
Den networks
Its current share price is Rs. 40.45
Market cap = Rs 1,930 crores
Target = Rs 51.15 (return of 26%)
Short term opportunity based on price/ value mismatch.
Working:
Here is the Data of Liquid assets that Den networks own
In October-2018 it has issued shares to Reliance industries at Rs. 72.66 and raised 2,045 crores of Rupees.
Here is the Position as on 31st March â 2021 and 30th September 2021
In current investment we can check the FY 21 annual report, it has invested mainly in Debt mutual funds. (Page no 81, FY 21 annual report) which means these investments can be considered as good as cash (very liquid)
Its current share price is Rs. 40.45
Market cap = Rs 1,930 crores
The logic here is, that the share price should ATLEAST trade equal to the value of the liquid investment it has. Here in this case potential market cap of Rs. 2,440 crores (price of 51.15)
Meaning an Upside potential of 26%
Why I think this discount will narrow down?
- This is not a holding company, in holding companies we can usually see discount in market cap relative to the value of their assets, which are mainly in terms of shares of other companies that are meant to be long term.
In case of Den networks, it has investment + cash & bank balance which are very liquid assets. Which is more than its market cap, thus this seems to be a price/value mismatch opportunity - In the past, there have been such cases, company called Selan exploration (market cap 300 crores) traded at market cap which was less than its cash equivalents, then the price gradually increased afterwards.
Another company named Elnet tech (market cap 60-70 crores) had this mismatch. Here too the price increase steadily afterwards.
What I feel about this opportunity?
Rupees 200 in a pant, that is on sale for Rupees 200.
Here once you purchase the pant, 200 rupees is all yours, meaning you get back what you paid for.
So the pant becomes free of cost for you.
Risk factor:
- Price may not necessarily reach its cash level for a long time, we may lose out on some other good opportunities.
Meaning it could take 2-3 years to reach its fair cash value, and earning 26% in 3 years on this investment does not seem like extra-ordinary return. - Further decrease in price is possible, the current price trend of the den network is in downtrend, all time low is around 25 rupees. This Price seems cheap, but price may reduce further.
So instead of Lump-sum investment at this point, it seems good idea to invest in SIP mode.
Disclosure: I current hold few shares which I had purchased for tracking purpose, No recent investment is made on the above logic of market cap trading less than its liquid assets.
Would like your views and opinion on this Opportunity.
3 Likes
Not much activity on TV 18 broadcast.
Views invited on the Reliance group company with reducing debt & improving top bottomline & ROCE ever since RIL took over the co from Raghav Behl. RIL OWNS 60% with FIIS owning 14% & RJ another 1.5%
Launch of Sports 18 WITH FIFA world 22 rights already in bag . What if they bag IPL rights as well?
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What will be effect on tv18 of the murdoch and uday shankar deal ? What will be the end shareholding of TV18 in Viacom18 ? Anybody analyzed the situation.
So far the company is not disclosed what percentage stake will be given for Rs.13,500 crs investment by Murdoch & co. i could not able to understand why the markets reacts so negatively about his news.
There is a note by spark capital saying after the investment from Murdoch & Shankar deal TV18 will hold only 18% of Viacom18. I donât know how spark got to this number.
Actually in social media, there is a rumour that stake of TV18 will reduce significantly in Viacom18 after this deal and that will affect its profitability. Further some say that if they win IPL rights, which may cost them 33,000 cr base price + 50% premium, then it will also affect the revenue of tv18.
Clarity shud be awaited. Mr. Ambani is known for value accretive deals.
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agreed but this is a good example of poor corporate governance in a listed company, that too Ambani`s as they are famous for this. I am not expecting clarification from company unless stock exchanges ask questions on volume surge or shareholders raises alarm.
the reduction in stake is pretty much a given considering primary infusion of capital, isnât it ? The value of TV18âs stake in Viacom18 after the infusion shouldnât decrease but in the short term, their share of the profits will take a hit as the new capital wonât start generating profits right awayâŚI guess thatâs why the stock has taken a beatingâŚin the long term, the revenue should increase in a way that ROEs are at least as much as they were before investment by Bodhi TreeâŚthat would have been the intent of Murdoch anywayâŚ
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TV18 Results out:
Revenues decreased from 1512 cr to 1295 cr QoQ while PAT decreased from 220 cr to 60 cr QoQ.
Profitability was impacted due to
-
25% increase in operating expenses
- Mainly due to investment in content and marketing. Further, the company is planning on increasing such investments going forward.
- Increase in Employees/Personnel Cost.
-
Decline in Subscription Revenue
- Expected to remain subdued till NTO 2.0 is implemented by TRAI.
-
Colours Rishtey went off DD FreeDish
- Major impact on Entertainment revenues for the company.
- Company did distribute 9 new movies on their digital platform, showing signs of them scaling up their OTT platform.
-
Flat Advertisement Revenues
- A high inflation environment continues to pose a challenge for advertisement growth.
-
Decline in news business despite state elections.
Overall, I personally donât see the company recovering from this anytime soon.
Ps. Not investment advice.
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Anyone still tracking this. What is future of combined entity with Network18 and TV18 merging?
How about current valuations?