Billionaire Mukesh Ambani-led Reliance Industries Ltd said on Thursday it plans to buy a 24.92% stake in television and movie production house Balaji Telefilms Ltd for Rs 413.28 crore ($64 million).
Reliance will buy 2.52 crore shares of Balaji Telefilims at Rs 164 apiece, it said in a stock-exchange filing.
Shares of Balaji Telefilms fell 1.7% on Thursday to close at Rs 186.65 apiece.
A stake purchase of more than 25% would have required Reliance to make an open offer to buy shares from public shareholders according to regulatory norms.
Reliance said the investment is in line with its plan to expand its telecom, digital and media businesses.
The diversified retail-to-energy conglomerate already owns television and digital media group Network18, which it had acquired three years ago.
Ambani had launched his telecom business under unit Reliance Jio Infocomm Ltd in September last year. Reliance Jio has shaken the telecom industry as it launched services for free in the initial months to attract customers that now total about 100 million.
Balaji Telefilms, led by Ekta Kapoor was founded in 1994, produces TV content for broadcasters. It also makes and distributes movies. Besides, it operates an over-the-top (OTT) video on demand platform focusing on original and exclusive Indian digital content.
The deal is expected to boost Reliance Jio's OTT business as it already has a partnership with Star India’s video-on-demand OTT content platform Hotstar.
A host of companies are launching OTT video platforms to tap into rising demand in a country where more people than ever before are buying smartphones and accessing the Internet. Netflix, Sony Liv, Zee group’s Ditto TV are among the other companies that have OTT video offerings in India.
Netflix has partnered with Reliance Jio's telecom rivals Bharti Airtel and Vodafone to offer OTT via direct-to-home and mobile platforms.
Balaji Telefilms’ revenue rose 43.6% to Rs 421 crore in the year ended 31 March 2017 from Rs 293 crore the previous year.
The transaction, which is expected to be completed within 45-60 days, is subject to shareholders' approval and regulatory compliances, the statement said.
Balaji Telefilms had last year decided to raise Rs 150 crore by issuing preference shares to global investors for the launch and expansion of its digital media unit.
