Telangana's leading industrialist Jupally Rameswar Rao is in talks to buy Associated Broadcasting Company (ABCPL) that runs news channels in Telugu, Kannada, Marathi and Gujarati under TV9 brand, said four persons in the know. ABCPL is controlled by venture capitalist Srini Raju.
Rao, founder of My Home group and known to be close to Telangana Chief Minister K Chandrasekhar Rao's family , is said to have developed interest in media business post Telangana formation and was looking at investing in regional language news channels.
If the negotiations reach a breakthrough, it could further consolidate the holding of persons close to politicians over regional media, both in print and electronic, in the Telugu speaking states of Andhra Pradesh and Telangana.
Political analyst and editor of a media house, who did not want to be named, said: "The growing control over media by the politicians and persons close to them across the country could lead to a dangerous scenario of increasing efforts by politicians to manufacture consent in their favour and suppress the voice of opposition and civil society."
ABCPL, the company that operates six news channels under TV9 brand, was promoted by Ravi Prakash and Srini Raju's investment entities iLabs Venture Capital and Chintalapati Holdings. Ravi Prakash, who currently acts as chief executive officer, owns around 10% stake and a few of his colleagues together own another 10%, while the balance close to 80% is held by Raju's investment arms. A person privy to the negotiations told ET: "A delegation on behalf of Rameswar Rao met the top management of ABCPL and shown interest to buy the bouquet of regional channels, including News9 -the loss-making English news channel."
ABCPL had given mandate to its investment bankers to look for buyers at a valuation of Rs 500-600 crore a couple of years ago. However, it could not seal the de al though it held talks with several interested players including some of the large national media houses.
The Hyderabad-headquartered media firm has of late improved its financial health both in terms of revenues and profits. In FY15, ABCPL had suffered a fall in total operating income at Rs 157.07 crore, down from Rs 159 crore in FY14, but improved its post-tax profit at Rs 4.99 crore, up from Rs 2.52 crore in FY14. F or the first ten months period in FY16, it has improved income to Rs 157.85 crore and registered high net profit of Rs 18.09 crore, according to a rating report by Care Ratings dated March 14.
"The ABCPL management is confident of further improving the financials and thereby bargain for better valuations," said the person. Confirming the group's interest in media business and the negotiations with ABCPL, a My Home group spokesperson said: "Looking at the overall scenario, My Home is not going ahead with this deal."
However, the person close to the negotiations said: "The negotiations are still on." Ravi Prakash and Srini Raju didn't respond to messages.