Once a glamour stock, NDTV headed for sickness?

After it palms off its loss-making subsidiaries to foolish strategic investors, what can stop NDTV from becoming a sick company?

NDTV reported a net loss of Rs34.27 crore for September quarter this year, on an operational income of Rs65.65 crore. This is not surprise. After all, it had reported a net loss of Rs11.85 crore on an income of Rs71.66 crore in the corresponding quarter last year. Indeed, NDTV has been making losses ever since it got listed. What is also not surprising is the company's statement said that revenues were "buoyant" in October and "we expect to see a turnaround in the next two quarters." Investors have been fed with enough of such rosy scenarios before. The facts have always turned out to be otherwise. What is surprising is that the company is still operational.

The fact is, NDTV has rarely made money from operations. For the last few years, its consolidated operations have been making cash losses and it has been running on money made by selling loss-making subsidiaries to foolish strategic investors like Turner International. This business of passing on the parcel is continuing even now.

In late October, NDTV has roped in Astro All Asia Networks Plc with which it will create a strategic alliance for lifestyle channels in India. Astro will acquire a 49% stake in NDTV Lifestyle by putting in $40 million, while the balance will be held by the company. NDTV Lifestyle operates NDTV Good Times, a loss-making channel with little viewership. Why Astro should be valuing this junk at $80 million beats us but NDTV has always found such buyers. NDTV Lifestyle was earlier being palmed off to Scripps of US.
 
After this, there will be little left to palm off. Whatever is left is losing money. Consolidated income from operations for the quarter was Rs78.48 crore and net loss was Rs 67.63 crore. This September quarter NDTV wrote off Rs24.18 as permanent loss of various investments in its subsidiaries.

NDTV, which runs channels like NDTV 24X7, NDTV India and NDTV Profit, has tried to be a broadcaster with a wide bouquet of channels but these have all flopped because of its gold-plated operations in a cut-throat business. Salaries at NDTV are humungous; carriage fees charged by distributors are high, while the advertising pie is hardly expanding. All this was obvious since 2005-06.

NDTV is a live example of two facts of the marketplace: One, private equity investors often suffer from gross misjudgement and two, glamour stocks usually deliver unglamorous returns. When launching the initial public offering (IPO) in April 2004, Prannoy Roy told investors: "We have historically made profits all through and paid good dividends. Investors should consider this while taking a decision." NDTV was backed by top private equity investors.

However, the fact is that before NDTV got listed, it had a different business model altogether. For a long period it was a content-supplier making fixed revenues. After its IPO, it attempted to be a multi-channel broadcasting company. Its IPO was over-subscribed 17 times and NDTV collected Rs110 crore offloading about 25% stake to the public. In the first year of its existence as a listed company NDTV posted a net loss of Rs50 crore (FY2004) and has been limping along all these years. It just doesn't seem to, does it? Well, here is a simple fact. The stock got listed on 19th May 2004. At the end of that day the stock price was Rs99. More than six years later, the price is Rs105.

Comments
KSV SUBRAMANIAN
1 decade ago
Why they are so anti-hindu ? They think they can fool all the people all the time. Their time is up. Nobody will feel their absence if they fold up. After all there is something called retribution.
Dinesh
1 decade ago
This is indeed very good news. Ms Dalal, when do you foresee NDTV shutting shop completely? That will be one good day for India....
Anil Kohli
1 decade ago
Very honestly no one is going to miss NDTV, if it were to go down the tube(Drain) seems more apt.

The staffers of this media entity have over indulged in their passion of majority bashing and in your face stuff.

All this while a few grumbled about their antics,ever since the #barkhagate the opinion is openly hostile. Public is baying for blood not just of the individual involved but NDTV as a whole.

We have been betrayed our trust has been abused.

Retribution is the only emotion visible among the large number of Indians. Sooner than later is better.

"From The Dizzy Heights of Kargil to Despairing Depths of Oblivion."
Prashanth KP
1 decade ago
Just awaiting its closure with eagerness. NDTV has reduced itself to a stooge of Congress, everything Muslim and vehemently Anti-Hindu and Anti-National! Losses apart, should be closed or should file for bankruptcy. Viewers should ensure this.
Amit
1 decade ago
Ah! before I forget, the blatanly Anti Hindu, Anti National would loose ratings is not something that was unexpected.
I only prefer Times, Mr Arab Goswami has a such better views that are balanced and he does not indulge in fanatical Anti Hindu ranting.
Madhusudan Thakkar
Replied to Amit comment 1 decade ago
Times Now,CNN-IBN,NewsX, and Headlines Today are also equally biased.Arnab Goswami,Rajdeep Sardesai,Rahul Kanwal and Seema Mustafa have made turned news channels as entertainment channels and" time pass channels".Full of sound and fury signifying nothing.
Off late they are doing lot of "dramabazi" on exposing scams but people know their "nautanki".
Funding of these channels should be investigated.
Amit
1 decade ago
We are sick of NDTV and its idiotic reporting anyway. Its a bigoted channel with equally bigoted anchors,
Good riddance I say, bye bye NDTV
RNandakumar
1 decade ago
NDTV was a novelty when unbiased sephology was offered to the unsuspecting voters. But when Pranoy started taking political sides and started becoming a pro congress news distributor the discerning views must have dropped NDTV.
Madhusudan Thakkar
1 decade ago
NDTV 24X7 is a SICKular channel and it is no wonder that it is heading for sickness. It an an unofficial channel of Congress party.Pranoy Roy,Barkha Dutt,Nidhi Razdan and Vikram Chandra are unofficial spokespersons of congress party. NDTV India, the Hindi channel also consists of pseudo secular gang comprising of Vinod Dua,Ravish Kumar,Abhigyan Praksah etc. Both news channels are blatantly biased.Both these channels have lost CREDIBILITY and GOODWILL..As regards to its entertainment channel the less said is better with cheap shows like "Rakhi ka Swayamber" and Rahul Mahajan's marriage.It is pertinent to note that in entertainment segment "Colors" was launched around same time and due to good programming it overtook leading channels like Star plus,Zee and Sony.Except "Highway on my plate" other program mes on NDTV Good Times are not up to the mark. NDTV profit has nothing new to offer.IBN is also headed towards same direction.Source of funds of these channels should be thoroughly investigated."Jaisi karni vaisi bharni."
vinod gupta
Replied to Madhusudan Thakkar comment 1 decade ago
madhusudan well said
jaisi karni waisi bharni
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