TRAI recos for radio cos in line with expectations: ENIL

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TRAI recos for radio cos in line with expectations: ENIL

In an exclusive interview with CNBC-TV18, Prashant Pandey, CEO, Entertainment Network India (ENIL), speaks about TRAI recommendations and gives his outlook going forward.

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Excerpts from Closing Bell on CNBC-TV18 Watch the full show » RELATED NEWS TRAI recos +ve for Dish TV, Hathway, Den Networks: I-Sec TRAI issues recos for FDI in broadcasting sector ALSO READ See latest News about Ent Network Ind See previous management interviews See what other Experts & Brokerages are saying about Ent Network Ind Ent Network Ind BSE | NSE 31/05/12 Are Mutual Funds betting on Ent Network Ind?

Media companies shot up today as the TRAI (Telecom Regulatory Authority of India) came out with recommendations to the information and broadcasting ministry on foreign investment caps in the broadcasting sector.

TRAI has also recommended 26% foreign investment in radio companies versus the current 20%.

In an exclusive interview with CNBC-TV18, Prashant Pandey, CEO, Entertainment Network India (ENIL), speaks about the recommendations and gives his outlook going forward.

Here is a verbatim transcript of the exclusive interview with Prashant Pandey on CNBC-TV18. Also watch the accompanying video.

Q: How have you read the recommendations particularly for FM radio channels of hiking foreign institutional investors (FII) investment up to 26%?

A: I think the 26% recommendation on foreign direct investment (FDI) is exactly inline with what most players in the radio industry have been asking for. I think the 26% cap is probably appropriate for the radio sector at this point in time, largely because the government considers it to be a sensitive sector unlike other media sector and that's probably why they have a cap on the news and other such things. So inline with all of this 26% is probably what we expected.

Q: What is the current cap and what is the foreign holding in ENIL specifically as of date?

A: Currently, it is 20%. ENIL, at some point in time, use to be at 20%, but off-late it's been in the region of about 10-11%.

Q: So you have some headroom already?

A: We already have some headroom. Here is the other point that many people keep asking for higher FDI limit, but the fact is that even the 20% has not been used for most radio broadcasters. The reason is very simple, the reason is that sectoral profitability has been a big issue and even if you go to relax the norms, I doubt if the FDI is going to come in a big way.