The share of Sun TV Network tumbled in the stock market on Thursday to close at Rs 244.35 from Rs 262.80 on the BSE, registering a loss of Rs 18.45 (a little over seven per cent).
Analysts attribute this to media reports that CBI has completed its preliminary enquiry into Mr Dayanithi Maran's role in the 2G spectrum allocation scam and an FIR may be filed within the next couple of days.
In the last one week, the share has lost over 14 per cent from the Monday's closing price of Rs 284.85. It is also partially attributed to the launch of Arasu Cable services by the State Government coupled with the 30 per cent entertainment tax imposed on DTH connections.
Sun Direct, part of the Sun TV group, being a dominant player in the Tamil Nadu market with over 70 per cent share, the general assumption is that the company will suffer a setback on this count.
Besides, quoting a TAM Media Researach, an analyst said viewership of Sun TV, though still the most watched channel in the State, has slipped to 63.9 per cent last week from 66.9 per cent two months ago. The group operates 20 television channels in four languages in the South — Tamil, Telugu, Kannada and Malayalam.
ICICI Securities in its report says though the current monopolistic business model of Sun TV continues to remain attractive, the stock is surrounded by uncertainty pertaining to the 2G scam and impact of Arasu Cable. The stock has depreciated over 40 per cent over the last 12 months.
Mr Kalanithi Maran, Chairman and Managing Director of the company, has pledged close 5 crore shares, representing 16.25 per cent of his holdings in the company.