Star India worth US$11.2BN says Morgan Stanley


Rebecca Hawkes

| 01 September 2015

The 21st Century Fox-owned broadcaster Star India has been valued at US$11.2 billion in a new report from global brokerage company Morgan Stanley.

Comparatively, India's most valued listed media conglomerate and Star's pay-TV rival, Zee Entertainment, was valued at $5.6 billion on Friday (28 August), with its direct-to-home (DTH) satellite arm Dish TV recording a closing price on the stock market of $1.6 billion.

Morgan Stanley's estimated fair market value of subsidiary Star TV was arrived at after increased advertising revenue from India contributed 11.3% of the total fair market value of its American parent. Its impact has increased as 21st Century Fox's advertising revenues from the developed world have dropped.

In India, 21st Century Fox executives are hoping to reach $1 billion in earnings before interest, tax and amortisation (EBITA) at the turn of the decade, according to Business Standard.

Speaking to analysts in August, James Murdoch, CEO, 21st Century Fox, said: "I think we're still very much on track to see $0.5 billion or so of EBITDA in India within the next three years or so, and a real velocity towards $1 billion of EBITDA shortly thereafter, around the end of the decade or the beginning of the next."

Star India has adopted a strategy to optimise its revenues through sports in India. Acquisitions of media rights to the Board of Control for Cricket in India's domestic and international matches in India until 2018 and digital rights for the Indian Premier League (IPL) until 2017, will continue to boost forthcoming revenues.

As of June 2015, Star TV's earnings from its entertainment business reached about $300 million (about INR19.2 billion).