Reliance Industries sitting on a Rs 90-crore loss in this smallcap stock

Mukesh Ambani-led Reliance Industries (RIL) is currently sitting on a Rs 90 crore loss in a smallcap firm and a prominent player in film and television production Balaji Telefilms.

In July 2017, RIL made an investment of Rs 413.28 crore in Ekta Kapoor-backed Balaji Telefilms. The conglomerate purchased 25.2 million equity shares at Rs 164 each. However, since the purchase price of Rs 164, Balaji Telefilms has given RIL a negative return of 21.3% compared to its current market price of Rs 129.

Nevertheless, Balaji Telefilms’ shares hit their 52-week low at Rs 35 in March 2023. Since then, the stock has rallied by 277% to touch its 52-week high of Rs 132 on February 15, 2024. The media and entertainment firm has also surged over 100% in the last six months.

Besides investment in Balaji Telefilms, RIL operates several TV channels and a JioCinema streaming app through its media and entertainment unit Viacom18. Earlier it was also reported that RIL and Walt Disney are looking to merge their Indian media operations.
Additionally, RIL is said to be in talks to buy a 29.8% stake in Tata Play, a subscription-based satellite TV and video streaming service, from Walt Disney, Business Standard newspaper reported citing sources close to the development.

The potential deal signifies Ambani-owned conglomerate’s strategic move to strengthen its presence in India’s television distribution sector and expand the reach of its OTT platform, JioCinema.

Tata Sons, the holding company of the Tata group, currently holds a majority 50.2% stake in Tata Play, with the rest of the shares owned by Temasek, a Singapore-based fund.

ET had reported in October last year citing sources aware of the development that Singapore-based investment firm Temasek is in advanced talks with the Tata Group to sell its 20% stake in Tata Play to the Indian conglomerate that owns the largest stake in the direct-to-home (DTH) company. However, no agreement was reached.

If the negotiations between RIL and Tata Play prove successful, it would mark the first collaboration between the Tata group and the Ambanis.

In Friday’s trade, RIL shares were trading 0.5% lower at Rs 2,926 on BSE.

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