Reliance Broadcast Network (RBN), the youngest media company from the Reliance-Anil Dhirubhai Ambani Group, is allotting 1.75 million preference shares to stock market bull Rakesh Jhunjhunwala for Rs 14.88 crore.

Citigroup Global Markets Mauritius Pvt Ltd and Goldman Sachs Investments (Mauritius) Ltd are two other investors who would be investing another Rs 35 crore in the Rs 400-crore preferential allotment the company has announced. While Rs 155 crore would come from investors, the promoters are pumping in Rs 245 crore through the issue. The preference shares would be issued at Rs 85 per share.

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Including the four promoters' entities, 25 others have been proposed by the RBN board for the preferential equity issue. RBN shares closed up five per cent at Rs 116 on the Bombay Stock Exchange on Thursday.

RBN runs its businesses under the brand name BIG, spread in FM radio, experiential marketing, the Out of Home (OOH, or outdoor) and digital space and to-be-launched TV channels. While there are a number of established players in all these verticals, RBN claims it has differentiated its offerings.

"Under the vertical BIG Live, we are not only doing on-ground activation but also creating Intellectual Property (IP). We recently did BIG Marathi Music Awards, for which GoodKnight was the sponsors and it was aired on ETV Marathi and Star Mazaa. We are doing a number of regional TV and film awards," said Katial. He said the company had done 300 on-ground brand activations in the past one year.
 

Overstretch denied
Analysts, however, said RBN had dipped its fingers in too many businesses and in verticals like OOH, most players in the market have acquired properties at unviable prices, a point that Katial denies. "RBN has invested in long-term, low-risk and quick payback inventories under its vertical BIG Street. We believe that 40 per cent of RBN's revenues would be from the OOH business in the next two years." RBN had an annual revenue of Rs 185 crore in 2009-10.

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