Press Release ABP News Network Private Limited
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Press Release ABP News Network Private Limited February 1, 2017 Ratings Amount Facilities Rating1 Rating Action (Rs. crore) CARE A-; Stable 40.0 Long-term Bank Facilities (Single A Minus; Outlook: Assigned (Rupees Forty Crore only) Stable) Details of facilities in Annexure-1 Detailed Rationale The rating assigned to the bank facilities of ABP News Network Private Limited (ANNPL) derives strength from the strong promoter group and experienced promoters with long track record in the media industry, established market position of ANNPL’s news channels in their respective genres, growing scale of operations, healthy cash accruals, comfortable liquidity and debt coverage indicators and initiatives for diversification into digital media platform to support future revenue growth. The above strengths are, however, partially offset by ANNPL’s significant dependence on advertisement revenue, amalgamation of group companies with accumulated losses into ANNPL, high competitive intensity in the news broadcasting space. The rating also factors in the impact of the amalgamation of group companies Going forward, continuous improvement in operations, sustained growth in income and profitability while improving the capital structure will be the key rating sensitivities. Detailed description of the key rating drivers ABP group has been in the business of publishing newspapers and magazines since 1922. In 2003 it forayed into electronic media space through ANNPL. The ABP group has evolved into a media conglomerate that has four 24-hour national TV news channels (ABP News, ABP Ananda, ABP Majha and ABP Asmita), 9 premier publications (Anandabazar Patrika, The Telegraph, Ebela, Desh, Sananda, Anandlok, Anandamela, Sananda Oriya, and TTIS), leading book publishing house (Ananda Publishers) and mobile-based information services (Mjoy). ABP News has consistently been able to maintain a strong position in the Hindi news genre with a viewership of around 130 million which has helped it garner growth in advertisement revenue. Though ANNPL’s major source of income is through advertisements contributing 97%-98% of the total revenue over the last three years, it is taking initiatives to diversify its revenue through subscription, content sales, event and digital media. However, the contribution of these revenue streams to the overall income profile remains minimal. The financial risk profile of the company is marked by growing scale of operations, healthy cash accruals, comfortable liquidity and debt coverage indicators. The established market position of ANNPL’s news channels have enabled the company to command healthy ad rate hikes and resulted in sustained growth in ad revenues and healthy operating margins. The amalgamation of group companies into ANNPL w.e.f. April 01, 2015 has resulted in transfer of advances made by ABP in its group companies for various business ventures in the books of ANNPL. Further, the networth of ANNPL turned negative due to transfer of losses from one of the group companies. However, since the loan is from parent company, and does not have any fixed repayment schedule, hence the same is not expected to have a significant drain on the cash flow of the company. Analytical approach: Standalone Applicable Criteria Criteria on assigning Outlook to Credit Ratings CARE’s Policy on Default Recognition Rating Methodology - Service Sector Companies Financial ratios – Non-Financial Sector 1Complete definition of the ratings assigned are available at www.careratings.com and other CARE publications 1 Credit Analysis & Research Limited Press Release About the Company ANNPL, incorporated in 2002 as Media Content & Communications Services India Private Limited (MCCS), was a part of the STAR group and a content provider to STAR News Broadcasting Limited (SNBL). In 2003, ABP Pvt Ltd (ABP; rated CARE A/CARE A1+) acquired 74% stake in MCCS through its fully owned subsidiary, ABP TV Private Limited (ATPL) which marked ABP group’s foray into electronic media space through STAR news channel. MCCS further went on to launch its 24 hour Bengali news channel ‘Star Ananda’ and Marathi news channel ‘Star Majha’. In April 2012, SNBL exited MCCS and sold its remaining 26% stake to ATPL, post which the name of the company was changed to its present name and the news channels were rebranded as ABP News (Hindi), ABP Ananda (Bengali) and ABP Majha (Marathi). In FY16 (refers to April 01 to March 31), ANNPL launched a Gujarati news channel ABP Asmita. Pursuant to a scheme of amalgamation, ATPL was merged with ANNPL w.e.f. April 01, 2015. Presently, ANNPL is a wholly-owned subsidiary of ABP. In FY16, ANNPL earned a PAT of Rs.60.5 crore (Rs.52.5 crore in FY15) on total operating income of Rs.409.9 crore (Rs.379.4 crore in FY15). During H1FY17, the company achieved revenue of Rs.206.2 crore and earned a PAT of Rs.19.5 crore. Status of non-cooperation with previous CRA: Not Applicable Any other information: Not Applicable Rating History for last three years: Please refer Annexure-2 Note on complexity levels of the rated instrument: CARE has classified instruments rated by it on the basis of complexity. This classification is available at www.careratings.com. Investors/market intermediaries/regulators or others are welcome to write to [email protected] for any clarifications. Analyst Contact: Name: Ms Richa Bagaria Tel: 033-4018 1653 Mobile : 9903470650 Email: [email protected] **For detailed Rationale Report and subscription information, please contact us at www.careratings.com About CARE Ratings: CARE Ratings commenced operations in April 1993 and over two decades, it has established itself as one of the leading credit rating agencies in India. CARE is registered with the Securities and Exchange Board of India (SEBI) and also recognized as an External Credit Assessment Institution (ECAI) by the Reserve Bank of India (RBI). CARE Ratings is proud of its rightful place in the Indian capital market built around investor confidence. CARE Ratings provides the entire spectrum of credit rating that helps the corporates to raise capital for their various requirements and assists the investors to form an informed investment decision based on the credit risk and their own risk-return expectations. Our rating and grading service offerings leverage our domain and analytical expertise backed by the methodologies congruent with the international best practices. Disclaimer CARE’s ratings are opinions on credit quality and are not recommendations to sanction, renew, disburse or recall the concerned bank facilities or to buy, sell or hold any security. CARE has based its ratings/outlooks on information obtained from sources believed by it to be accurate and reliable. CARE does not, however, guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. Most entities whose bank facilities/instruments are rated by CARE have paid a credit rating fee, based on the amount and type of bank facilities/instruments. In case of partnership/proprietary concerns, the rating /outlook assigned by CARE is based on the capital deployed by the partners/proprietor and the financial strength of the firm at present. The rating/outlook may undergo change in case of withdrawal of capital or the unsecured loans brought in by the partners/proprietor in addition to the financial performance and other relevant factors. 2 Credit Analysis & Research Limited Press Release Annexure-1: Details of Instruments/Facilities Name of the Date of Coupon Maturity Size of the Rating assigned Instrument Issuance Rate Date Issue along with Rating (Rs. crore) Outlook Fund Based - LT-Term Loan - - December, 2017 18.00 CARE A-; Stable Fund Based - LT-Cash Credit - - - 22.00 CARE A-; Stable Annexure-2: Rating History of last three years Sr. No. Name of the Current Ratings Rating history Instrument/Bank Type Amount Rating Date(s) & Date(s) & Date(s) & Date(s) & Facilities Outstanding Rating(s) Rating(s) Rating(s) Rating(s) (Rs. crore) assigned in assigned in assigned in assigned in 2016-2017 2015-2016 2014-2015 2013-2014 1. Fund Based - LT-Term LT 18.00 CARE A-; - - - - Loan Stable 2. Fund Based - LT-Cash LT 22.00 CARE A-; - - - - Credit Stable 3 Credit Analysis & Research Limited Press Release CONTACT Head Office Mumbai Mr. Amod Khanorkar Mr. Saikat Roy Mobile: + 91 98190 84000 Mobile: + 91 98209 98779 E-mail: [email protected] E-mail: [email protected] CREDIT ANALYSIS & RESEARCH LIMITED Corporate Office: 4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (East), Mumbai - 400 022 Tel: +91-22-6754 3456 | Fax: +91-22-6754 3457 | E-mail: [email protected] AHMEDABAD Mr. Mehul Pandya 32, Titanium, Prahaladnagar Corporate Road, JAIPUR Satellite, Ahmedabad - 380 015 Mr. Nikhil Soni Cell: +91-98242 56265 304, Pashupati Akshat Heights, Plot No. D-91, Tel: +91-79-4026 5656 Madho Singh Road, Near Collectorate Circle, E-mail: [email protected] Bani Park, Jaipur - 302 016. Cell: +91 – 95490 33222 BENGALURU Tel: +91-141-402 0213 / 14 Mr. Deepak Prajapati E-mail: [email protected] Unit No. 1101-1102, 11th Floor, Prestige Meridian II, No. 30, M.G. Road, Bangalore - 560 001. KOLKATA Cell: +91-9099028864 Ms. Priti Agarwal Tel: +91-80-4115 0445, 4165 4529 3rd Floor, Prasad Chambers, (Shagun Mall Bldg.) E-mail: [email protected] 10A, Shakespeare Sarani, Kolkata - 700 071. Cell: +91-98319 67110 CHANDIGARH Tel: +91-33- 4018 1600 Mr. Sajan Goyal E-mail: [email protected] SCF No. 54-55, First Floor, Phase 11, NEW DELHI Sector 65, Mohali - 160062 Ms. Swati Agrawal Chandigarh 13th Floor, E-1 Block, Videocon Tower, Cell: +91 99888 05650 Jhandewalan Extension, New Delhi - 110 055. Tel: +91-172-5171 100 / 09 Cell: +91-98117 45677 Email: [email protected] Tel: +91-11-4533 3200 E-mail: [email protected] CHENNAI Mr.