TV18 Broadcast, Network 18 shares tank up to 5% after Reliance-Disney deal; RIL gains

Shares of Network18 Media & Investments Ltd and TV18 Broadcast Ltd tanked 5% to hit their respective lower bands on Thursday, a day after the parent Reliance Industries Ltd announced the merger of streaming and TV assets with Disney to create a more than ₹70,000 crore media giant.

Reliance Industries, however, advanced more than 1% to hit a high of ₹2,957.95 on NSE in morning deals. RIL was the top gainer among Nifty50 stocks in morning trade.

Shares of other media giant Zee Entertainment Enterprises declined over 4% after the deal announcement. Experts believe RIL’s merger with Disney will create an even bigger entity with a portfolio of 115 channels and a 40-45% share in advertising revenue. This will intensify competition within the media industry and impact the profitability and margins of media companies.

Viacom18, a Reliance Industries subsidiary and Disney’s Indian arm Star India have signed an agreement to merge their businesses to create a TV and digital streaming joint venture entity.

Media and entertainment conglomerate Network18 Media & Investments Ltd shares tanked around 5% to hit the lower circuit at ₹107 on NSE, around 7.91 lakh company shares traded in morning hour trades, while the market cap dropped to ₹11,202 crore.

Network18 Media has interests in television, digital content, e-commerce, filmed entertainment, print and allied businesses.

Shares of TV18 Broadcast Ltd, a subsidiary of Network18 Media, also tanked 5% to hit the lower circuit at ₹59.55 apiece on NSE. Network18’s main business is broadcasting. The company operates the largest news network in India, which spans general news, regional news and business news channels such as CNBC-TV18, New18 India and CNN-News18.

Viacom18 Media, a subsidiary of TV18, holds a portfolio of entertainment channels, sports channels and digital platforms.

According to the deal announced by Reliance and Disney, media operations of Viacom18 will be amalgamated with Star India Pvt Ltd (SIPL) to create a joint venture valued at more than ₹70,000 crore.

In the joint venture, Reliance will hold 16.34%, Viacom18 a 46.82% stake and Walt Disney will have a 36.84% shareholding. Nita Ambani, wife of billionaire Mukesh Ambani, will be the chairperson of the merged entity.

Experts believe that with a portfolio of two streaming platforms and a bouquet of around 120 TV channels, Viacom18 and Disney are expected to dominate India’s media sector.  Upstox