A fund owned by US-based billionaire investor George Soros bought a 3% stake in an Indian entertainment company for $100m (£51.4m), it was confirmed yesterday.
Soros, who said last week India and China were acting as "new colonialists" in Africa, paid for a slice of Reliance Entertainment, which runs Bollywood film studios, social-networking and games sites and has plans to start a television satellite broadcasting service in the country.
The stake values Reliance Entertainment, owned by billionaire Anil Ambani, at $3.3bn. Ambani acrimoniously broke with his elder brother Mukesh in 2005 – splitting India’s largest company in two. Anil has reorganized his half of the company and will see stock in his $3bn power division debut on Monday.
Analysts say Soros’ interest in Reliance, which is rumored to be considering an initial public offering for its entertainment arm, was piqued by its plans to expand into television. India has the world’s third-biggest cable-TV market and is forecast to become Asia’s most lucrative pay-TV market by 2015.
Foreign firms have made their presence felt. New Delhi Television recently sold 26% in a unit to NBC Universal for $150m. Disney has a minority stake in UTV. Rupert Murdoch is considered a pioneer – having a joint satellite broadcasting venture with Tata group and India’s successful Star channel.
Reliance is also India’s second-largest mobile phone operator and tied up with Microsoft in November to offer internet-based television services in the country.
Stocks in the Indian market have been on a roller coaster this week – with the Sensex index dropping more than 600 points on Thursday, when India’s economic growth predictions were lower than expected. It dropped a further 62 points yesterday.
To underline the turmoil, a $1.6bn share offering by an Indian joint venture of Dubai’s Emaar Properties was postponed yesterday. However, a vote of confidence was signaled by Morgan Stanley, which announced it will start its first fund on the subcontinent in 14 years to attract the $750bn expected to flow into the markets over the next four years.
The flotation of Reliance Power last month escaped the panic in the markets. All $3bn worth of shares to the public were sold in a minute in India’s biggest share flotation. It means Anil Ambani will overtake his older brother to become the country’s richest man when trading begins on Monday
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