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Crisil-CII scripting investors' guide

BS Bureau

Credit rating agency Crisil Ltd and the Confederation of India Industries are jointly working on development of a mechanism whereby investors wishing to put their money in the media and the entertainment industry will be able to access the financial viability and the status of all segments of the industry.

The mechanism will work as an indicative rating instrument whereby investors of all categories will get to know the risk and the benefits involved in investing in a particular segment of the industry. This rating will also indicate the kind of return that an investor can expect to reap.

"The idea of developing an index for the industry was fuelled by the fact that majority of the investors do not have any idea on the way the entertainment industry operates - the risks they are exposed to their means of distribution and other operational details. They have a very vague idea on their source of funds and the exact equation through which revenue flows into the company," the vice-president of Ambit Corp Finance Pte Ltd, Ashutosh Ghanekar, said at a CII seminar.

"This will be sort of SWOT analysis where one will be conversant about the health of each segment of the industry at any particular period of time. We will be updating our ratings as and when there is considerable change in the risk factors or any other aspects of a certain segment," he explained. The rating will also facilitate companies intending to access the capital market.

The size of the entertainment industry is a huge Rs 131.35 billion where television holds 29 per cent followed by the cablewallas at 23 per cent and the film industry at 22 per cent. TV Software, music segment the radio and the live entertainment hold, 14 per cent, eight per cent, and 2 per cent each.

Ghanekar while delivering a speech on the second day of a seminar on development of the services sector, said that "capital impetus is one of the most crucial requirement of the industry, but a large part of the industry is not represented at the stock markets."

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