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Reliance Media jumps 10% in a flat market

Reliance Mediaworks, controlled by billionaire Anil Ambani, shot up on the bourses today after it agreed to raise Rs 605 crore from a foreign private equity fund. Shares of the company are trading 9.5 percent higher at Rs 64.25 while the BSE Sensex is trading 27 points lower at 17076 levels.“We have signed a term-sheet agreement…to sell a substantial minority stake in the company’s film and media services division,” said the source, without giving further details about the foreign investor.The company, with a market capitalisation of about $50.8 million, plans to use the funds to primarily cut debt and for expansion.

Reliance Mediaworks has three main businesses – a theatre distribution operation under BIG Cinemas, a TV production unit under BIG Synergy, and a film and media services segment.The film and media services business includes motion picture processing, image enhancement and restoration, animation and visual effects, and is attracting business from overseas.Reliance Mediaworks had said in December that this division will contribute 60 percent to overall revenue in 2012-13 from about 40 percent then.

The company also expected its overall orderbook for this division to more than double to 2 billion rupees in the current fiscal year ending March 31, 2013.Reliance Mediaworks had said in January that its board approved separating its exhibition and film and media services businesses into subsidiaries.Shares of the company, which ended 3.2 percent lower on Tuesday, have plunged more than 14 percent since the start of this year compared with an 11 percent fall in the benchmark index.


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