Reliance-Disney's Rs 70k cr JV a big boost to India's entertainment industry

Reliance-Disney JV: In a major move set to shake up media industry, Reliance Industries Limited (RIL), backed by billionaire Mukesh Ambani, has embarked on a crucial venture in media and entertainment sector by joining forces with Viacom 18 Media Private Limited and Walt Disney Company. 

agreement entails merging media operations of Viacom18 and Star India into a joint venture (JV), marking a strategic move to boost RIL's foothold in industry.

India media and entertainment industry

Media & Entertainment (M&E) industry in India is anticipated to hit $100 billion by 2030, as per Invest India. While an EY report said that industry is projected to grow from Rs 2.34 lakh crore ($29.2 billion) to Rs 2.83 lakh crore ($35.4 billion) by 2025, with a compound annual growth rate (CAGR) of 10 per cent. 

Furrmore, advertising revenue is forecasted to reach Rs 39,400 crore ($5.42 billion) by 2024. 

Traditional media, including television, print, filmed entertainment, out-of-home (OOH), music, and radio, accounted for 58 per cent of sector's revenues in 2022.

Deal contours

Under terms of deal, RIL will inject Rs 11,500 crore billion into JV, securing a 16.34 per cent stake. investment stresses upon RIL's commitment to expanding its presence in media landscape. 

Through a subsidiary, Viacom18, RIL will maintain control of JV with a total ownership of 63.16 per cent, while Disney will hold remaining 36.84 per cent.

transaction values JV at Rs 70,350 crore on a post-money basis, reflecting major potential and value attributed to combined media assets of Viacom18 and Star India, Motilal Oswal analysts ted.

valuation metrics of deal highlight strategic importance of partnership and its potential for future growth and profitability. Meanwhile, collaboration will unite a diverse portfolio of media assets, including popular entertainment and sports channels such as Colors, StarPlus, StarGOLD, Star Sports, and Sports18. 

Additionally, viewers will have access to digital platforms like JioCinema and Hotstar, enhancing reach and accessibility of content across India, broker said.

Among key highlights of partnership is exclusive rights granted to JV to distribute Disney films and productions in India. With access to over 30,000 Disney content assets, JV is set to offer an extensive array of entertainment options to consumers nationwide.

Furrmore, manment team of JV will be led by Nita Ambani as Chairperson.

combined strength of Viacom18's extensive channel portfolio, including 40 channels and JioCinema OTT platform, alongside Star India's vast viewer base of over 700 million and Disney+ Hotstar OTT platform, positions JV as a formidable player in Indian media landscape.

With merger of media assets and exclusive distribution rights to Disney content, JV aims to cater to diverse entertainment needs of Indian audiences while capitalising on rapidly evolving digital landscape, Motilal Oswal added.

partnership marks a crucial milestone for RIL as it seeks to expand its presence in media and entertainment sector, leveraging strategic collaborations to drive growth and invation in dynamic Indian market.

Considering se factors, Motilal Oswal has a ‘buy’ rating on Reliance Industries for a target price of Rs 3,210 per share.

As of 1:20 pm, shares of Reliance Industries were trading 0.52 higher at Rs 2,924 per share.