Ad-for-equity investor BCCL to pick up to 7% stake in Onida

Mirc Electronics Ltd, the makers of Onida and IGO brand electronics products, has secured Rs 22.75 crore ($3.5 million) from ad-for-equity media investor Bennett, Coleman & Co Ltd (BCCL), the parent of publications such as The Times of India, as per a stock market disclosure.

BCCL has subscribed to warrants which is convertible into shares at a minimum price of Rs 14.66 each. This would give it as much as 7.3 per cent of the diluted equity base, as per VCCircle estimates.

The media house has paid a quarter of the total subscription amount and would shell out the rest at the time of conversion into equity.

This is part of the agreement signed between the two companies earlier this month according to which Onida would advertise its products, brands and services through BCCL's media properties.

Cash-rich BCCL is a publisher of newspapers such as The Times of India and The Economic Times, besides several other print publications and TV channels, such as Times Now, Movies Now, and digital and electronic media properties.

BCCL invests in firms through its arm Brand Capital. Although sector agnostic it largely targets firms with a consumer facing product or service that require advertising. It uses its ad space in various media properties as currency to pick stake in small, medium as well as few large firms.

In the consumer electronics space itself it has previously backed names like Videocon and Weston.

Onida was started by Gulu Mirchandani and Vijay Mansukhani in 1981 in Mumbai. It was one of the top home-grown TV brands before Korean brands Samsung and LG pumped up competition and eventually went on to dominate the sector.

Even as some other big electronics brands like BPL collapsed, Onida has managed to stay afloat. It diversified its product basket from primarily TV to appliances and mobile handsets. Though it has managed to survive it is a pale shadow of its former self.

Mirc Electronics that owns the Onida brand saw its total revenues almost halve from Rs 1,942 crore in FY11 to Rs 1,073 crore in FY15; it posted net loss of Rs 4.5 crore last year compared with profit of Rs 29 crore in FY11.

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