IndustrySpeak: Indian OOH players feel the ripples of Lehman Brothers` bankruptcy
When investment bank Lehman Brothers filed for bankruptcy on Monday, September 15, it sent ripples around the world triggering stock market crashes. The move has wiped off over Rs 2,000 crore from market valuation of those Indian companies in which the US financial major had made equity investments. Lehman Brothers has invested in India's OOH sector too. exchange4media talks to some industry players to find out to what extent this bankruptcy would affect the industry.
 
                                                                When the 158-year-old investment bank Lehman Brothers filed for bankruptcy on Monday, September 15, it sent ripples around the world triggering stock market crashes. The move has wiped off over Rs 2,000 crore from market valuation of those Indian companies in which the US financial major had made equity investments. Lehman Brothers has invested in India's OOH sector too.
According to an industry source, Lehman Brothers doesn't have large holdings in India in terms of proprietary book, which is believed to be around $ 100 million.
In recent times, private equity players such as Warburg Pincus, Lehman Brothers, Goldman Sachs, ICICI Ventures and UTI Ventures have made private equity investments worth Rs 600 crore in leading OOH companies such as Laqshya OOH, Times Innovative Media Ltd (TIM) and Serve & Volley. As a result, the OOH industry is expected to cross the Rs 1,700-crore mark in 2008.
It may be recalled that in January this year, Lehman Brothers and Goldman Sachs had picked up a 20 per cent stake in TIM. However, TIM officials were not available for comments at the time of filing this report.
The other OOH players that exchange4media spoke to had mixed reactions as to the repercussions of the bankruptcy. While some raised the caution bar, others felt that Lehman Brothers' exit would hardly affect the industry.
Soumitra Bhattacharyya, CEO, Lashya Outdoor, said that though it was a sad news, "it does not affect us in any way. It would be a waste of time for Laqshya (or any OOH company) to make advance plans to stave off bankruptcy to any of its investor because it is something that is totally irrelevant. Laqshya today is focused on growing its business, and I guess, as we grow our business and become stronger, we also become more and more capable of handling any shocks that might come from any front. That is the basis of any business, including ours."
"I don't think that the Lehman Brothers move will trigger negative thoughts in the industry, as the only way that Lehman Brothers could contribute to our industry was by way of funding, and since this industry is already operating without too much of funding, there is no need for anyone to press any panic buttons at all. It is just that one more potential investor is not there now, but there would be a lot many others, provided the fundamentals of this industry and the company to be invested in both remain strong," Bhattacharyya added.
In contrast, Mangesh Borse, Director, Symbiosis Advertising, said, "The news of Lehman Brothers' bankruptcy has definitely put a hold on my plans to partner any foreign equity player as there are many factors that are beyond one's control in a foreign company. Looking forward, if at all I would go for private equity investment, I would prefer an India company then a foreign one."
BS Sujay, Director, Sujay Advertising, said, "The 158-year-old Lehman Brothers filing for bankruptcy gives food for thought to the Indian outdoor media owners for the future. Earlier, it was the private equity firms who used to go into the details of a company that they wanted to invest in, but after this development, I think it is time for us media owners to evaluate and have a sound understanding of the company with whom they sign the memorandum of understanding."
Meanwhile, in a major selling spree that began on August 21, Lehman Brothers sold its shares worth Rs 400 crore in nearly 10 companies, and one of them was NIIT. Kapil Saurabh, Manager-Investment Relations, NIIT, in an official communiqué, clarified that Lehman Brothers' selling off its share of the participatory note (P-note) did not affect the core functioning of the company. He added, "Lehman Brothers had investment as a third party via the P-note, and before declaring bankruptcy it had already transferred its stake to another party. This entire development took place last month. So, NIIT has not been affected, by and large, in any of its functioning because of this bankruptcy."
(Participatory notes or P-notes are derivative instruments issued by the Securities and Exchange Board of India. Through this, foreign investors that are not registered in India can trade in the Indian markets.)
Despite the bankruptcy filed by Lehman Brothers, PE investors will manage to garner a higher stake in Indian companies for a lesser price as compared to other sectors like banking or infrastructure. The growing wave of consolidation and structural changes in the OOH sector is only going to grow bigger and better in the country, forcing the valuation graphs of media businesses to move northwards.
Also read:
Lehman Brothers and Goldman Sachs pick up 20 pc stake in Times OOH
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E4M Our strategy is to target younger audiences through Sports: Rajiv Dubey, Dabur
The Head of Media at Dabur India spoke exclusively to exchange4media on the World Cup, associating with Indian Idol, the company’s digital spending and much more
With quirky campaigns, memes and moment marketing, timed with the ongoing World Cup and particularly the India-Pakistan matches, Dabur India has got considerable consumer attention for its popular brands – Red Paste, Cool King Hair Oil, Chyawanprash, Dabur Vita and the recently launched Bae Fresh Gel toothpaste.
The 140-year-old company is going big on key sporting events, World Television Premiere (WTP) movies and reality shows. It is now gearing up to become the title sponsor of popular talent show ‘Indian Idol’ on Sony TV for the first time, shared Rajiv Dubey, who leads the media strategy at Dabur.
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Swapan Seth's new book 'COOL' is out
The book is a reflection of the author's 'eclectic taste across categories'
Advertising professional and art collector Swapan Seth has announced the launch of his new book COOL. The book is described as "a ready reckoner to the hip and the happening, of the known and the very unknown."
The book is a reflection of the author's "eclectic taste across categories: from boltholes to exotic hideaways."
COOL has been published by Simon & Schuster India and is available on Amazon.
Seth is an ad veteran with a long and illustrious career in the industry. He became the youngest-ever Creative Director at Clarion at age 24. He was VP at 26 at Trikaya Grey. Two years later, he started his agency Equus.
He writes for publications such as The Economic Times, Hindustan Times and India Today. This is his second book and he has previously published THIS IS ALL I HAVE TO SAY.
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Disney Star signs 9 sponsors for Asia Cup PAK
Charged by Thums Up, Nerolac Paint+, Amazon Pay, Jindal Panther, My11Circle, MRF, Samsung Galaxy Z Flip5, Wild Stone and Thums Up come on board
e4m Staff Disney Star has signed nine broadcast and digital streaming sponsors for the upcoming Asia Cup.
Charged by Thums Up, Nerolac Paint+, Amazon Pay, Jindal Panther, My11Circle, MRF, Samsung Galaxy Z Flip5, Wild Stone and Thums Up have come on board for the upcoming tournament.
As reported earlier by exchange4media, Disney Star has sought Rs 26 crore for the co-presenting sponsorship on TV and Rs 30 crore for Disney+ Hotstar.
According to industry sources, the associate sponsorship on Star Sports has been priced at Rs 19.66 crore, whereas for the ‘powered by’ sponsorship on Disney+ Hotstar, the broadcaster is seeking Rs 18 crore.
As per the information available with exchange4media, Disney+ Hotstar has three sponsorship tiers-- co-presenting (Rs 30 crore), powered by (Rs 18 crore) and associate sponsorship (Rs 12 crore). The broadcaster is offering an estimated reach of 120-140 million for co-presenting sponsors, 90-100 million for powered by and 60-70 million for associate sponsorship.
A spot buy for 10 seconds has been priced at Rs 25 lakh for the India vs Pakistan matches, while for the non-India matches, the ad rate for 10 second is Rs 2.3 lakh. The India matches plus the final for ODIs has been priced at Rs 17 lakh per 10 seconds.
Asia Cup is scheduled to be held from 30 August, 2023, to September 17, 2023.
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Sorted 360 wins creative & social media mandate of Reliance Mall
The agency will manage offline and online campaigns for Reliance Mall
Sorted 360, an integrated creative and social media agency, has won the mandate to providing brand solutions for Reliance Malls across India.
“Sorted 360 is set to enhance Reliance Malls' market presence with their unparalleled creative prowess and strategic thinking,” read a press release.
“Sorted 360's commitment to pushing the boundaries of creative communication aligns perfectly with Reliance Malls' ethos. With a pan-India presence spanning across 19 cities and growing, Reliance Malls has consistently captivated customers by offering an array of Reliance brands and third-party fashion & lifestyle brands. The mall has established an unparalleled connection with its patrons through superior quality, a remarkable value proposition, and an unmatched shopping experience,” it read further.
"We are thrilled to welcome Sorted 360 as our trusted partner in advancing our brand presence across the nation," said the Head of Marketing at Relaice Malls. "Their proven expertise in retail, shopping center management, and innovative creative strategies make them the perfect fit for our vision."
"Partnering with Reliance Malls is a testament to our commitment to shaping extraordinary brand experiences," remarked Prerana Anatharam, Co-founder of Sorted 360. "We are excited to leverage our strategic and creative acumen to further elevate Reliance Malls as the epitome of convenience, choice, and excellence."
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KlugKlug onboards Hemang Mehta as Country Manager for Indias
Mehta was most recently Head of Agency Relationships at Network 18 Media & Investments
KlugKlug has appointed Hemang Mehta as its Country Manager for India.
Mehta will play a pivotal role in driving KlugKlug's growth and expansion within the Indian market and be responsible for Sales & GTM Strategy
Prior to that, he has also represented organisations like Exponential (now VDX.tv), India Today Digital and Rediff.com. His expertise spans various domains including digital media sales, mobile marketing, media planning, and buying, social media marketing, and more.
Hemang Mehta expressed his enthusiasm about joining KlugKlug, saying, "I am thrilled to be a part of KlugKlug, a forward-thinking platform that is reshaping the influencer marketing landscape. As much as I look forward to collaborating with the exuberant team at KlugKlug, I am super excited to interact with the brands to deliver powerful data-backed Influencer solutions that will guarantee business outcomes."
Commenting on the appointment, Kalyan Kumar, Co-Founder and CEO of KlugKlug, stated, "We are excited to welcome Hemang Mehta to our team as the Country Manager for India. His extensive experience in digital media sales and marketing will be instrumental in driving our efforts to provide influencer marketing solutions to our clients. We believe Hemang's leadership will be key in scaling our operations and expanding our reach within the Indian market."
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