Sahara India to sell stake in film, TV unit

Mumbai: Sahara India Financial Corp. Ltd, the country’s largest residuary non-banking finance company (RNBC), will sell its equity stake in Sahara One Media and Entertainment Ltd and use the proceeds to meet investment norms laid down by India’s banking regulator, the Reserve Bank of India, or RBI.
RBI recently directed Sahara not to accept deposits that mature beyond 30 June 2011.
An RNBC is required to invest all its deposits in government bonds, deposits of other commercial banks and corporate bonds with ratings of double A+ (AA+), indicating high safety.

Sahara India is one of the promoters of Sahara One Media and currently holds 16.32% stake in the company. Sahara One Media, which is into the business of television and film production, has a market value of Rs450.30 crore, based on its share price of Rs209 at close of trading on the Bombay Stock Exchange on Monday. This means that Sahara India’s stake is worth Rs73.49 crore.
Shares of the production house hit their lifetime high of Rs820 each on BSE on 10 January. At that price, its stake in the firm would have fetched Sahara India Rs288.33 crore.
Also Read Mint’s earlier coverage of the issue
In a June communication to RBI, days before the regulator banned it from accepting fresh deposits (this ban was subsequently lifted and the RNBC was given a three-year sunset window), Sahara India agreed to sell its equity holding in Sahara One to “bridge the gap in directed investments” in accordance with the norms of the central bank.
In that communication, a copy of which has been reviewed by Mint, Sahara India said it would bridge the gap “through internal accruals and/or by way of sale/mortgage/lien on its fixed assets”.
It assured the central bank that it would reduce the gap of Rs714.81 crore in directed investments to zero by December. “We are committed to make good the gap for the purpose of security for depositors by March 2009,” the firm said.
Abhijet Sarckar, head of corporate communications, Sahara India group, said in an email that, “Sahara India Financial Corp. Ltd proposes to transfer 3,075,000 shares of Sahara One to Sahara India Commercial Corp. Ltd through the BSE (Bombay Stock Exchange) on 26 September and as required under the regulations, information in this regard has been submitted Friday evening to BSE.”
BSE was yet to announce this information on its site till Monday evening.
Sarckar also said that there is no gap in Sahara India’s directed investment. “We would like to draw your attention to the fact sheet published by us wherein it was clearly stated that the value of directed investments held by the company fully covers its liability towards depositors.”