Boadcasting firms score as govt okays FM Radio Phase-III

Shares of broadcasting companies that own radio stations today surged in the range of 1-15% after the government cleared guidelines of the much-delayed FM Radio Phase-III expansion.

Shares of Reliance Broadcast among others rallied and settled for the day at Rs 86.10, up 7.09% after witnessing an intra-day high of Rs 91.40 on the BSE. TV Today network ended the day at Rs 66.25 (up 2.71%), Jagran Prakashan was up nearly 1% at Rs 121.75, Entertainment Network India closed the day at Rs 278.75, up 5.75% on the BSE, Next Mediaworks was up 14.75% at Rs 6.69.

Analysts said stocks of radio operators surged after the government cleared guidelines that will allow private radio channels to broadcast news of All India Radio and enable revenue generation of Rs 1,733 crore from the auction of license for services in 227 cities.

Market analysts welcomed the decision and said that it is a positive move, which has come into effect after being in the pipeline for more than two years. A meeting of the Cabinet chaired by Prime Minister Manmohan Singh also approved hiking of foreign investment limit on private FM radio broadcasting company to 26% from the current 20%.

The Phase-I and Phase-II policies have resulted in a total revenue accrual of about Rs 1,733 crore up to May 31, 2011 by way of one time entry fee, migration fee and annual fee among others. The uptrend in the counter was in tandem with the broader market which closed in the positive zone. The BSE benchmark Sensex today spurted by over 350 points to regain 19,000 mark after more than two months. Similarly, the broad-based
National Stock Exchange index Nifty rose by 103.50 points to 5,728.95.