Private equity players are expected to continue investing in the Indian media and entertainment segment in a big way as domestic consumption is undeterred by the global financial crisis, said Mohit Ralhan of Baring Private Equity Partners to Televisionpoint.com.
Ralhan said, “The discretionary expenses would rise Due to the increasing middle class and rising per capita income paving the way to achieve compounded annual growth rate (CAGR) of 18.5 per cent of this sector. It will ensure the flow of private equity investment in this segment in the near future.”
“In the last year 40 private equity players invested in the media and entertainment segment and this year the trend is expected to continue. The Indian media and entertainment industry has 85 per cent domestic consumption and a strong NRI base,” Ralhan said.
A joint report on the media and entertainment industry by the Federation of Indian Chambers of Commerce and Industry (FICCI) and PricewaterhouseCoopers (PWC) stated: “In 2007-08, the Indian media and entertainment industry grew 17 per cent over the previous year touching the $11.92 billion mark.”
Ralhan explains further, “The Indian film industry that is the largest in the world in terms of the number of films produced, was worth $ 2.12 billion in 2006. It is estimated to grow at a CAGR of 16 per cent to $ 4.42 billion by 2011.
“Other entertainment content areas like music and television also have huge potential in the international market. According to an estimate, the total value of Indian content sold overseas is over $20 crore in a year. This is expected to grow over 20 per cent every year. These encouraging opportunities are luring the private equity players for the investments.” Ralhan says.
According to the report by the Federation of Indian Chambers of Commerce and Industry and PWC, “The Indian print media industry is projected to grow by 14 per cent over the next five years, reaching to Rs 28,100 crore in 2011-12 from the present Rs 14,900 crore. In 2007-08 the Indian radio advertising industry recorded a growth of 24 per cent over the previous year and stood at Rs 6,500 crore.”
Source: Television Point