Network18 Dilutes Its Stake In BookMyShow From 60 perc to 40 perc

Network18 which was a majority stake holder in BookMyShow.com has diluted the same. BookMyShow’s 60% of the shares (held privately) were in the hands of Network18. After the sell-out, Network18 will hold 40%, & will still be a single largest share-holder in the web-company.

Just this week we saw Accel Partners investing Rs. 100 Crores (US$ 18 Million) in BookMyShow. Has this news something to do with the decision to disinvest? Apparently yes. Network18 has clarified that the selling of the shares is in line with its agenda of, “Reducing stakes in digital and other non-broadcasting assets to create value for the Network18 shareholders and allow infusion of growth capital in these assets to propel them to the next stage.” In simple words, Network18 sold its 20% stake to Accel Partners for Rs. 45 Crores (US$ 8.1 Million) & the Venture Capital firm put in the rest of the money as additional investment!. This decision has had a positive impact on Network18 whose share-value grew by more than 3% & settled at Rs. 34.20.

Clarifying the move, Raghav Bahl MD Network18 said, “After a phase of investment in building our digital and other non-broadcasting businesses, we believe that many of these assets have reached an inflection point and can now help in creating value for all our stakeholders”. This means Network18 is gradually withdrawing its investments from companies that are not in line with its main core of business, that is broadcasting content. Earlier this year Network18 had made a similar move by selling its stake in NetworkPlay to Bertelsmann who later sold it to Gruner + Jahr.

Network18, as a company operates a portfolio of digital content and e-commerce assets including IBNLive, in.com, MoneyControl.com, etc. It even has a minority stake in Online Travel Agent (OTA) Yatra.com. BookMyShow, as an online ticketing agent has achieved significant milestones & has not been afraid to go beyond selling movie tickets. Hence this sell-off should in no means, reflect poorly on it. What do you think?