Reliance gets significant strategic investment into Viacom18

Target Date - October 31, 2022

Viacom18 (V18) is amongst the leading players in the Indian television sector with 38 channels in nine languages across various genres including general entertainment, movies, sports, youth, music and kids. Besides, it also has OTT streaming platform Voot.

V18 is currently a 51:49 JV between Reliance Industries Limited (RIL) owned TV18 and Paramount Global.

RIL has now made the following key announcements :

  • Bodhi Tree Systems (BTS) will invest Rs 13,500 crore (~$1.78 billion) into V18
    • BTS is a newly formed platform between Lupa Systems (private holding company of James Murdoch) and Uday Shankar, the media veteran
    • BTS will be investing the mentioned amount by raising money from a consortium of investors.
  • A wholly owned subsidiary of RIL i.e., Reliance Projects & Property Management Services will invest Rs 1,645 crore (~$216 million) into V18
  • JioCinema App will be contributed/ transferred to V18
    • Whether for some consideration or free is unclear? My guess is that it’s without any consideration. Implied value would have already been factored in the overall calculations.

Given the increasing competition in the Indian media sector, the subject transaction does makes sense and helps derisking RIL’s core business (O2C, telecom and renewables) from the funding pressures of the media business.

The strategic investors being well known veterans are a good catch too. It should help secure RIL’s future economic interest in the business.

Though post deal shareholding has not been disclosed, it’s speculated that RIL will hold the majority, BTS 40% and balance about 10% Paramount.

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