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Sep 06, 2013, 10.29 PM IST | Source: CNBC-TV18

Slump fails to impact investor confidence in media sector

Of the 17 deals in 2010, 14 were together valued at USD 170 million. The sector cracked 23 deals in 2011, valued at USD 170 million. The sector saw 51 deals being struck in 2012, and 28 of these make up for over USD 1.25 billion.

The slowing economy does not seem to have affected investor confidence in the media and entertainment industry. A Grant Thornton report says this accounts for one-billion-plus dollars worth of deals that have been struck in the sector in 2012 alone, reports CNBC-TV18's Vineetha Athrey.

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The report further says that this sector has not only been mopping up the big bucks since 2010, investor interest has been steadily rising.

Of the 17 deals in 2010, 14 were together valued at USD 170 million. The sector cracked 23 deals in 2011, valued at USD 710 million. The sector saw 51 deals being struck in 2012, and 28 of these make up for over USD 1.25 billion.

The big ones include TV18's acquisition of Eenadu TV Network and Disney's consolidation of its stake in UTV.

Grant Thornton attributes this investment frenzy to not just fresh investor interest, but also some hectic expansion on the back of soaring market penetration.

Girish Menon, Leader - Media & Entertainment, Grant Thornton India, said: "It's a combination of strong domestic consumption, growing younger population, growing media penetration; so regional sectors are becoming more interesting."

Now there is some worry that this sector may not be the flavour of the season in 2013.

So far this year, only 17 deals have been struck, totalling over USD 173 million.

And with digitisation taking longer than expected, ad revenues still not seeing a big surge, and overall sluggishness in the economy, investor sentiment in both the news and general entertainment space is tapering.

But experts are not too worried. They say the last few months have thrown up greater clarity on the implementation of DTH. And the industry hopes that government's commitment to see this through will re-energise investor interest in the sector. So while 2013 may see a bit of a struggle, 2014 could see some blockbuster developments.

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