MUMBAI (Reuters) – Blackstone Group (BX.N) will invest about $50 million in the parent of media firm Jagran Prakashan (JAGP.BO), as the U.S. private equity group seeks to ride strong growth in India’s print media market, the firms said.
The firms did not disclose the size of the stake that Blackstone would take in Jagran Media Network Pvt Ltd, but news of the investment on Wednesday helped lift shares of the listed unit by nearly 9 percent.
The shares later eased to trade up by 3.2 percent.
“Print media in Indian languages is poised to experience significant growth in the coming years, driven by increasing personal consumption levels in the Tier II/III cities as well as rural India,” Akhil Gupta, chairman and managing director of Blackstone Advisors India Pvt Ltd, said in a note.
Jagran Prakashan publishes 37 editions of its flagship brand Dainik Jagran across 11 states as well as I-Next, a bilingual compact newspaper and City Plus, a weekly English tabloid.
The money would be used to improve the liquidity of Jagran, and for expansion and improving its printing capacity and also for acquisitions, Sanjay Gupta, chief executive officer of Jagran Prakashan told CNBC TV-18.
Blackstone would not take a stake in the listed entity, he added.
“At this moment, there are certain things on the radar but due to our NDA signed, I can’t disclose those names,” he said, referring to the non-disclosure agreement.
Private equity investment in India fell more than 60 percent in 2009 but in recent months have shown signs of a rebound.
Blackstone’s deal with Jagran follows a $425 million investment made in March by a group of investors including Morgan Stanley’s (MS.N) infrastructure arm, Goldman Sachs (GS.N) and General Atlantic in Asian Genco Pte Ltd, which has stakes in Indian power generation assets.
Private-equity firms invested about $4.1 billion through 269 deals in India during 2009, compared with $10.3 billion from 452 deals in the year earlier, according to Venture Intelligence, a research service focused on private equity and M&A.
In 2010, such investments totalled just over $1 billion through mid-March with 37 deals completed.
By Bharghavi Nagaraju (Editing by Surojit Gupta)