(Mid-day Multimedia is a part of Rakesh Jhunjhunwala holdings )
This interview took place in Dec 07 at CNBC TV18
Q: What is going right for the company? Is there anything that the market can expect in terms of an announcement or any sort of capital raising plans? Do you just think that this is normal market movement?
A: This is a market movement. Basically, media stocks are in the limelight. We have not gone up the same way as the other media stocks have gone up. We are playing a little catch up right now.
We are planning to raise investments, but that should not have any significant impact in terms of the valuation on the company. That is an outgoing process, in terms of the development of the company and in terms of our expansion plans that will keep happening from time to time.
Primarily, the markets are at a level where people are looking at a fundamental growth story and they have started believing in Mid-Day as a national tabloid brand.
Q: Will the capital raising be from a strategic investor or from the promoters themselves? What kind of a shortlist do you have, in terms of this capital raising?
A: It will be a combination of both. There would be some from the promoters and some from the strategic investor.
Q: How much stake would you be looking to offload to a strategic investor? What is your total need for capital at this point?
A: Those are not public information. I am not getting into those things, but it is not something substantial. It is within the requirement of what we have, in terms of incremental presence in several cities, so that we can build a national tabloid brand and it would be sufficient to fund those plans.
Q: How much money do you need to become a pan-India player, in terms of the print aspect and radio roll out? What sort of capital would you need going 12 months out?
A: I will not go to the figures aspect. part of it. If we plan to be a national tabloid brand, only in the newspaper space, it requires a lot of money, in terms of building up circulation. So, our plan is actually a combination of net and print strategy, to acquire our fundamental core readers in the middle of the day. So, we have been able to cut down the investment to reasonable amounts and not look at very huge investments, that a typical national newspaper would need to establish itself.
Q: Q2 performance has not been much to write about. There were net losses reported. Do you see yourself in the black for the full year? What are the plans to improve profits?
A: Whenever we spoke to analysts and investors, we made it very clear that this is a medium-term policy for establishing a middle of the line media company on a national scale and this is going to take time.
So, people have to go along with the strategy. You will have to go along with the time that it will take. Obviously, as we launched new editions and new products, they are going to absorb capital as well as variable costs. Therefore, it is a two-year strategy, where we turn it round and make Mid-Day into a national tabloid brand. But till that time, there would be pain.
I am not saying that there will not be quarters where we will show good profits. That might happen, but I do not want to give any wrong expectation to anybody. This is clearly a two-year game that we are playing, after which we will emerge as a national tabloid company in the country.
Q: With regards to the radio business, how big a revenue contributor will it be to your business? Do you hope to come out with any new stations, in terms of launches, in some of the next 12-18 months?
A: We have four stations running right now. There are three more that will come up, in Pune, Ahmedabad and Calcutta, two-three months from now. So, there will be seven stations across seven major metro cities in the country.
Radio is growing very fast, both in terms of audience and revenue growth. It will take us another 12-14 months before we breakeven and start showing money in that business.
As per Sep 08 share holding pattern of Mid-Day, Rakesh Jhunjhunwala is holding 22,50,000 shares of the company