Warburg set to buy 7% in Dainik Bhaskar group

MUMBAI: The Dainik Bhaskar group, publisher of Hindi market leader Dainik Bhaskar and Gujarati daily Divya Bhaskar, has reached an understanding with Warburg Pincus, a leading private equity investor, to offer a 7% stake to the latter.

According to Ashish Kanchan, partner, Ambit Corporate Finance, which is doing the deal, "the Dainik Bhaskar group and Warburg Pincus have reached an understanding and the investment will be about Rs 150 crore. The exact commercial modalities are still being worked out". The Dainik Bhaskar group is a joint promoter of DNA along with the Zee group.

Warburg Pincus has acquired a reputation for spotting firms that are on the threshold of big growth. It has been an early investor in Bharti Tele-Ventures and Gujarat Ambuja and exited only after the firms delivered sales and profit growth.

This, however, is the first time that Warburg has invested in the print media in India. Kanchan said the investment would fund the general expansion of the Dainik Bhaskar group in the vernacular print media.

Based on the sum being raised, a back-of-the-envelope calculation suggests that the Dainik Bhaskar group is being valued around Rs 1,800-2,000 crore. This compares well with other listed print media groups.

Jagran Prakashan, a Hindi newspaper group, has a market capitalisation of around Rs 1,500 crore, while HT Media's market cap is pegged around Rs 2,184 crore.