A day after Reliance Industries (RIL) announced the consolidation of its media and distribution properties under a single entity, which will see Network 18 Media & Investments, TV18 Broadcast, Hathway Cable & Datacom and Den Networks coalescing into a single unit, shares of these firms surged to hit their upper circuits on BSE on February 18.
Shares of TV18 Broadcast, Hathway Cable & Datacom surged to hit their respective 20 percent upper circuits.
Den Networks shares also jumped to hit 10 percent upper circuit and shares of Network 18 Media & Investments were locked in their 5 percent upper circuit.
Shares of Reliance Industries, however, slipped over a percent in the morning trade.
Reliance Industries is consolidating its media and distribution properties under a single entity, making Network 18 the vanguard of the conglomerate’s advance in the media and entertainment business.
India’s largest private sector company by market value said that, as a result, Network 18, one of India’s largest listed media companies, will become an entity with about Rs 8,000 crore in annual revenue and benefit from substantial economies of scale.
Read more: RIL to consolidate media, distribution entities under Network18 Media & Investments
Brokerages see it as a positive move for Network18 and Reliance Industries as well, for it may provide better value to the segment.
"We see this as a positive event for the Network18 and Reliance Industries as this will provide a better value to the segment as it provides better cash flow management and better cross-selling of services," said Sameer Kalra, Founder of Target Investing.
"At consolidated bases, the company will be net debt-free and can allocate free cash flow to the businesses as and when required. This might also bring the company closer to bringing a strategic investor or private equity to provide value unlocking to Network 18," Kalra added.
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