Date:19/08/2005 URL: http://www.thehindubusinessline.com/2005/08/19/stories/2005081902131500.htm

Back Newspaper cos make a splash

Latha Venkatraman
Virendra Verma

Mumbai , Aug. 18

, THE Government's decision to allow FIIs to invest up to 26 per cent in newspaper companies has propped up interest in the shares of companies in this sector.

A good response to the initial public offering of HT Media, which publishes the newspaper Hindustan Times, has also acted as a trigger for buying in these stocks.

Shares that are witnessing buying interest include Mid-Day Multimedia, Deccan Chronicle Holdings and Sandesh, which runs a Gujarati newspaper. Stock prices of these companies have risen 20-49 per cent in the last one week.

In today's trading, Deccan Chronicle rose 18.67 per cent at Rs 339.05 on the BSE. Mid-Day Multimedia climbed 17.16 per cent to Rs 95.25 and Sandesh rose 3.43 per cent to Rs 244.40.

Until recently, FIIs were not allowed to invest in newspaper companies.

Another reason for the interest in this sector is the good response to HT Media IPO which received bids 18 times the size of the issue.

"The fundamentals for this industry looks good and is poised to be on a trajectory of growth,'' said the industry official.

Mid-Day Multimedia has been able to maintain its advertising revenue despite the launch of three new newspapers in Mumbai, the market in which it operates. Additionally, the radio business looks promising with the Government agreeing to a revenue-sharing model, a senior official of Mid-Day said.

"Mid-Day should turn in good financial numbers for this fiscal as its advertising revenues are growing robustly and the change in Government's policy on radio also augurs well,'' he said.

Although, the September quarter is traditionally known to be a slack period for newspaper industry because of the South-West monsoon season, this time around newspapers have been able to maintain revenue levels. Besides, newsprint prices have been stabilising facilitating an improvement in profit margins.