Mukesh Ambani once said that ‘data is the new oil’ and the recent deal with Balaji Telefilms fits with the overall theme which Reliance Industries is targeting with the help of Jio, Porinju Veliyath, Equity Intelligence India said in an interview with CNBC-TV18.
Reliance Industries Ltd (RIL) on Thursday said that its board has approved to pick around 25 percent stake in Balaji Telefilms by acquiring 2.52 crore shares for around Rs. 413 crores.
The company has already more than doubled investors’ wealth so far in the year 2017 and this deal will provide further impetus to push through newer highs. The stock closed at a 52-week high of 197.90 on Thursday on the NSE.
Reacting to the news, Balaji Telefilms rallied over 8 percent in morning trade on Friday to hit a fresh 52-week high of Rs202.80.
The company’s board has approved making investments in the equity shares of Balaji Telefilms Ltd for acquiring 2.52 crore equity shares constituting 24.92 percent, Reliance Industries said in a BSE filing.
“It is a huge win-win situation for Balaji Tele because they will get the capital and customer base of Jio which has nearly 7 crore customers. A lot of them could be potential customers for ALTBalaji,” said Veliyath.
“The deal can take the company and the stock to a completely differently growth orbit. It is a huge extension of the value chain for Reliance Jio. There is a lot of synergy for both the companies,” he said.
The Mumbai-based media and entertainment firm said proceeds from the transaction would be utilised to further speed up content development initiatives, especially for its over-the-top content platform ALTBalaji, to help it compete with other global and India OTT service providers.
Commenting on the media companies, Porinju said that he is bullish on the sector considering the fact that we are a country with 1300 million population which presents a huge potential.
I see huge growth in market cap of media companies in the next 5-10 years. But, companies who are not evolving with time will lose their niche over time, he explained.
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