Reliance-FB deal: Network18, Hathway, Den Network stocks in focus

Our Bureau | | Updated on: Apr 22, 2020

A 3D-printed Facebook logo | Photo Credit: DADO RUVIC

Facebook has announced an investment of ₹43,574 crore into Mukesh Ambani’s Reliance Jio platforms

Thanks to Reliance Jio-Facebook deal, other group stocks from the Network18 stable hogged the limelight on Wednesday. Facebook has announced the signing of binding agreements for an investment of ₹43,574 crore into Mukesh Ambani’s Reliance Jio platforms.

Reliance Industries in February had announced a consolidation of its media and distribution businesses spread across multiple entities into Network18. Under the scheme of arrangement, TV18 Broadcast, Hathway Cable & Datacom and Den Networks will merge into Network18 Media & Investments.

Shares of Network18 Media & Investments rose 3.47 per cent to ₹22.35; Hathway Cable Datacom and Hathway Bhawani Cabletel & Datacom surged 16 per cent and 5 per cent to ₹18.30 and ₹9.26 respectively; and Den Networks jumped 5 per cent to ₹41 .

Scheme details

Under the scheme, 92 shares of Network18 will be given for every 100 shares of TV18, 78 shares of Network18 for every 100 shares of Hathway and 191 shares of Network18 for every 100 shares of Den. The date for the merger was effective from February 1, 2020.

The broadcasting business will be housed in Network18 and the cable and ISP businesses in two separate wholly-owned subsidiaries of Network18. “The restructuring shall create value-chain integration, and render substantial economies of scale. The scheme shall also simplify the corporate structure of the group by reducing the number of listed entities,” the company had then said in a statement.

“The media industry is accelerating towards being a B2C play, led both by market factors and through regulation. An integrated media play shall further increase the breadth as well as depth of the group’s consumer touch points, and allow for retaining a larger share of the consumer’s spend on content,” it had added.

Network18 will be an integrated media and distribution company with a revenue of ₹8,000 crore. It will be net-debt free at a consolidated level. The consolidation of the cable businesses of Den and Hathway in one entity will leverage the combined strength of the 27,000 LCO partners who act as the touch points to 15 million households, the statement further said.

Following the merger, Reliance’s holding in Network18 will reduce from 75 per cent to 64 per cent.

Published on April 22, 2020
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