BBC tunes in to FM radio

Mumbai, Nov. 21: BBC Worldwide, the commercial arm of Britain’s public service broadcaster, has filed an application with the Foreign Investment Promotion Board (FIPB) seeking permission to establish and operate an FM radio station in Mumbai.

The application was filed on November 14, just three days before the government cleared a proposal permitting 20 per cent foreign investment in the FM radio business.

The rider attached is that the 20 per cent cap will include foreign direct investment (FDI), investments by non-resident Indians and persons of Indian origin (PIOs) and portfolio investment.

Until now, foreign investment of up to 20 per cent was permitted in radio under the Portfolio Investment Schemes under the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 while FDI was not permitted.

The rules have now been changed in the light of a changed scenario even as the government prepares to launch the second phase of the FM radio broadcasting services.

BBC Worldwide hasn’t said in its application who it intends to partner in the FM radio business.

Last December, BBC Worldwide signed an arrangement with Bennett and Coleman Ltd, publishers of Times of India and Economic Times, to publish the 29 magazines in the Times’ stable, including Femina and Shipping Times through a 50:50 venture called Worldwide Media.

The Times group has a FM radio venture called Radio Mirchi, which operates in seven cities, including Mumbai and Calcutta.

However, it is not known whether BBC Worldwide will pick up a stake in the venture or find another partner.

Radio Mirchi is planning to come out with an initial public offering, which will be the first by a FM station. It has already filed a red herring prospectus with the Sebi.

The company plans to offer 12 million shares with a face value of Rs 10 each at a premium to be decided through a book-building process. The book-running lead managers to the issue are JM Morgan Stanley Ltd and Enam Financial Consultants Pvt Ltd.