ZMCL to invest Rs 165.78 crore for TV shopping channel

In order to shorten the launch period and increase the pace of growth, the company is buying out 80 per cent stake in two of the existing companies of India Today Group

BestMediaInfo Bureau | Mumbai | March 1, 2016

Zee Media Corporation Limited, the news broadcast network of Essel Group, has announced through a BSE filing that the company will be investing a total of Rs 165.78 crore over four years in speeding the launch of teleshopping business.

The company has mentioned that the board of directors gave an in-principle nod for the acquisition of 80 per cent stake in India Today Group's loss making e-commerce and teleshopping brands Today Merchandise Pvt Ltd (TMPL) and Today Retail Network Pvt Ltd (TRNPL).

The initial buy-out will mean an investment of about Rs 39.78 crore to acquire 49 per cent stake giving operational and managerial control to ZMCL. Later, over the next four years, the company will invest another Rs 126 crore. TMPL was incorporated in 2010, while TRNPL in 2007.

ZMCL had plans to launch a teleshopping entity for some time now; however, the analysis explained by the company in BSE filing has clarified the reasons for acquisition. “TV shopping with its promising potential holds great investment value for the company. With its investment in the target companies which have built the infrastructure for the TV shopping channel along with a complementing website, the company will be able to not only shorten the launching time of the TV shopping channel but also be able to scale up a faster pace. The company with its existing broadcast operations will also be able to drive the synergy benefits from this proposed investment,” as stated by the company.

The turnover of both the companies had been subsequently falling in last three years which might have pushed for this acquisition. TMPL clocked turnover of Rs 5.11 crore (2013), Rs 5.25 crore (2014) and Rs 3.84 crore (2015) respectively. Similarly, for TRNPL, the figures were Rs 49.80 crore (2013), Rs 52.85 crore (2014) and Rs 37.36 crore (2015), respectively.

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