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If there is one industry that investors were gung-ho about last year it was media. And that explains the rash of deals that took place in 2007—45 in all. The segment that took away a lion’s share of the investments was television; television also played host to the largest transaction in the media & entertainment industry last year, when the Singapore government-owned Temasek pumped Rs 1,100 crore ($259 million) into INX Media, a television broadcasting firm. TV clearly is where the action is.

As per a recently-released FICCI-PwC report, the television industry registered a growth of 18 per cent over the previous year to clock revenues of Rs 22,600 crore. A three-year picture is even more impressive—a cumulative average growth of 21 per cent. And that growth isn’t expected to flag—by 2012, the television segment is expected to generate revenues of Rs 60,000 crore. Small wonder then that investors want to get into Indian media companies at a relatively early stage.

Nimbus Communications was the first company in early 2007 that got investment from private equity players. “(Such frenetic deal-making) signals the coming of age of media companies. Indian promoters have taken their outfits to a scale where even Walt Disney and Time Warner have gone ahead to do equity deals with them,” explains Ravi Sardana, Senior Vice President, ICICI Securities. Such investor interest is also working wonders for valuations.

The market cap of all media companies stands at around Rs 60,000 crore ($15 billion) currently, and is expected to double in the next 4-5 years, leaving plenty of headroom for returns. Akhil Gupta, Chairman, Blackstone India, a private equity major, sees scope for sustained growth in advertising revenues. That’s because, says Gupta, 65 per cent of India’s GDP is personal consumption (as against 45 per cent in the case of China).

According to private equity investors, the business has also become scalable with the opening up of multiple platforms. There are plenty of markets in India that are still under-penetrated and media companies can expand their business by entering into new geographies.

Yet, it’s not all hunky-dory: investors also feel the sector needs to consolidate and make structural changes for it to be more attractive for equity capital infusion. No one’s complaining too loudly, though.

— Anusha Subramanian