Friday, August 01, 2008

100 Billion...

You know how European clubs have super-expensive buyout clauses on footballers - like Manchester United has their 80 million pound buyout clause for the over-hyped CR. Well, in the light of my speculative post that Uncle M could look at buying BCCL, someone called up to say that even he won't be able to afford it. Rumours are rife on the markets that when the stock markets return back to their growth phase (if they do) that BCCL will list. A few months ago, I said that BCCL could look at a $12 billion valuation. But guess what, people are already talking of an absolutely insane valuation of $100 billion for BCCL. Yes, that is ONE HUNDRED BILLION USD. And I'm not smoking anything. No really, this number has been bandied about.
Just to give some sense of perspective, Google, the undisputed 800-pound gorilla of the internet is worth $150 billion. Uncle M's News Corporation is worth something like $37 billion. As much as I respect Samir Jain for changing the face of the media in India, waking it up from its slumber in the 1980's and modernising it (and just like I think that Times will still probably do the best and most balanced implementation of Private Treaties deals compared to the others copying them), this valuation does seem a bit crazy, and I can't buy into it. Not with poor integration, an extremely poor web presence. But... if this is being looked at from the light of 2010, a $50 billion plus valuation might just be possible. Uncle M better watch out!


Anonymous said...

writing-day-after-boring-day (or kite flying as some may want to call it) about billion dollar deals and million dollar investments, business journalists' senses for money have become numb I think (only while writing). They tend to lose perspective of the massiveness of a $100 bn. Despite accounting for the hype driven overvaluation, a 50bn valuation for BCCL is not just crazy, but stupid. Uncle M didn't ever say he wanted to be a kamikaze pilot.

Anonymous said...

Mr. Jain Sr. likes to do this valuation exercise every couple of years... It keeps his senior staff in line and where they belong. In BCCL. :)

They are not going to sell, unless they absolutely have to. And they don't. Hell, the man wouldn't go to meet the PM. Vindi Banga comes to meet him to beg for kinder treatment to his floundering company. You think he is going to tolerate shareholders?

Banks line up at 7 BSZ Marg to lend him money at ridiculous rock bottom rates. And keep in mind BCCL is zero debt company.

the 100 billion valuation is crazy, no doubt and even the 50 billion one. but do the following search and discovery:

Look up the PE's of the best media companies in India. Depending on how good u think BCCL knows its business and the rate at which it is adding them, pick one of those numbers.

Multiply that by 1000 odd crores. Does the number boggle the mind yet?


Anonymous said...

Poor old news x is in news again..there are rumours that mr.ghosh will soon be on his way out.There has been constant speculation for the past couple of months because of some internal problems.The channel is back to square one with its employees having left it for greener pastures .The channel has certainly lot learnt from the mistakes it had made in the past.The deputy political editor of the channel speaks in the most atrocious english which makes you cringe.The coverage too is going nowhere with the north indian brigade in the channel hell bent on screwing things for it.Hope the mukherjees wake up from there slumber

GBO said...

General Motors made a loss of 15-16 billions last quarter and has a market cap of ? ? ? so go figure on valuation while they put more plants up and sell a brand to a leading Indian corporate house.