Private equity firm New Silk Route (NSR) will spend up to $20 million (Rs 90 crore) to raise its holding in INX Media Ltd to 70 per cent. The firm will buy out stakes of two existing investors, Temasek, and Kotak Private Equity, while New Vernon is likely to continue to be invested in the company.
The proposal to do so is pending approval with the Foreign Investment Promotion Board (FIPB). media veteran Pradeep Guha has been asked by NSR to take charge as chief executive.
At present, NSR holds 20 per cent in INX. It will invest from its $1.4-billion, Asia-dedicated fund, of which only a third is invested outside India. Three years earlier, the four PE investors had committed $170 million in the entertainment channel. Last year, the original promoters, Peter and Indrani Mukerjea, had exited from the company. This gave ownership of the channel to the four PE investors.
According to foreign investment guidelines, up to 100 per cent is allowed in non-news channels. In an interview to Business Standard, Parag Saxena, Chief Executive Officer and Founding General Partner of the firm, said the fund would increase its stake in the media company to 70 per cent by buying out stakes of the two existing investors up to $20 million.
“We are the sole investor willing to put in money. Everyone else has taken a passive approach,” said Saxena. He added that since none of the other investors had been active for at least a year, it had led them to buy a majority stake in the firm. “The valuation has come down significantly. It is a black mark on the portfolio,” added Saxena. “Pradeep Guha will be able to come in and make a difference to the company.” INX is going through a restructuring exercise. While the other two loss-making entities within the network are being sold — 9x to Zee Networks and INX News to Vinay Chhajlani, promoter of the Indore-based regional dailies, Nai Dunia and Nav Dunia — the private equity firm will try to make it a profitable venture.
“We would be looking at expanding in regional music channels very soon,” said Saxena.
