Following the collapse of merger and acquisition talks with Airtel Wynk, Times Internet and Tencent-backed Gaana merged with Times Group’s listed subsidiary, Entertainment Network India Limited (ENIL), in December 2023. ENIL, known for its flagship brand Radio Mirchi, is the Radio Mirchi Parent Company. The deal has surprisingly received little media attention to date.
Notably, Gaana was acquired for Rs 25 crore, according to ENIL’s filings with the National Stock Exchange (NSE). ENIL, which is promoted by Bennett Coleman, operates the well-known FM radio brand ‘Radio Mirchi.’
Financial Impact of Gaana Acquisition on Radio Mirchi Parent Company
For context, Gaana had raised over $200 million during its lifetime and was last valued at approximately $580 million, according to Entrackr.
The consolidation of Gaana with ENIL suggests it was a distress sale, with the company likely abandoning hopes of a third-party acquisition. Details about the acquisition remain scarce, and there is no clarity on Tencent’s stake in the 14-year-old platform.
Entrackr’s inquiries to Times Internet and ENIL on Friday went unanswered. Updates will be provided if responses are received.
According to Entrackr, Times Internet previously held a majority stake in Gaana, while Tencent owned about 35% until September 2020.
Management Changes and Financial Strategies
To support the platform, Times Internet has been injecting debt into Gaana regularly. In July 2023, Gaana received Rs 100 crore in debt from Times Internet, which was later converted into equity shares. Times Internet has now committed to injecting up to Rs 10 crore in debt, as per recent regulatory filings. ENIL’s CEO, Yatish Mehrishi, also reported an investment of Rs 15 crore in the first quarter of FY25.
Due to restrictions on equity investments from bordering countries, Gaana received consecutive debt rounds totaling $90 million from Tencent in September 2020 and June 2021.
The decline of Gaana is evident from its revenue, which plummeted by over 80% to Rs 12.5 crore in FY24, as reported by Mehrishi during an investor call in May.
Post-acquisition, ENIL placed Gaana behind a paywall and increased the subscription fee to Rs 599, reflecting in the last quarter’s revenue of Rs 9.5 crore.
Meanwhile, ENIL’s consolidated operating revenue fell by 25.79% quarter-over-quarter to Rs 113.46 crore, with the company reporting a loss of Rs 5.45 crore in Q1 FY25.
Gaana also experienced a management change, with former CEO Prashan Agarwal replaced by Sandeep Lodha in mid-2021. Lodha departed in July 2023, and Gaana is currently overseen by ENIL’s CEO, Mehrishi.
Amid the split of Times Group assets between Samir and Vineet Jain, Times Internet has been divesting its portfolio and incubated companies over the past three years. Recently, it sold its subsidiary ETMoney to 360 One (formerly IIFL Wealth) for approximately $44 million. This marks the seventh subsidiary Times Internet has exited since 2021. In June, Amazon acquired MX Player’s assets from Times Internet, and in February 2022, MX TakaTak was sold to ShareChat. DineOut was acquired by Swiggy in May 2022, and in the same year, Times Internet sold MensXP, iDiva, and Hypp to e-commerce unicorn Mensa.
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