Singing a New Tune

When private equity company India Value Fund (IVF) decided to exit its investment in FM radio company Radio City last year, it chose to not take the conventional route of getting investment bankers to initiate conversations with prospective buyers. Instead, it asked the then CEO of Radio City, Apurva Purohit, to do the needful. It was a tall task, considering that most media companies are known for being disorganised and not adhering to governance rules. But Purohit, a former state-level hockey player, managed to sell the business to Jagran Prakashan for close to Rs 400 crore - much more than what IVF had paid to pick up a stake in the company in 2007 (IVF is known to have invested Rs 80 crore into the business).

"IVF gave me the mandate to steer the exit process due to my experience and understanding of the media industry. Also, since I ran the business for 10 long years, I was in a better position to explain the value that I had built," says Purohit, now President at Jagran Group. Under her leadership, the FM radio company had made it to several best companies to work for lists (across sectors) - a rare feat for a media company - which also enthused interest from several financial investors and private equity companies. But Purohit was clear that "for this business to grow, it made sense to look at a multi-media platform".

Though Purohit was in talks with many leading media conglomerates, Jagran was the fastest to revert. "The deal happened due to Jagran's comfort with me and my comfort with Jagran. IVF got involved only at the last stage," she recounts. According to Satish Chander, MD, IVF, nobody other than Purohit could have pitched the business better. "Not only did Apurva lead the deal, she also played a role in giving much-needed comfort to the investors that she had indeed built a good organisation."

Purohit is credited with scaling up Radio City from a four-station company, when she took charge in 2005, to 20 stations last year, and also for bringing respite to the radio industry from crippling regulations - one of which entailed paying royalty to composers and lyricists for broadcasting their songs. Paying between 12 and 25 per cent of their revenues as royalty made profitability a distant dream.

Prashant Panday, CEO, Radio Mirchi (one of Radio City's biggest competitors), who spent hours with Purohit at the Bombay High Court fighting the copyrights battle, says, "As the leader of AROI (Association of Radio Operators for India), she succeeded in projecting broadcasters as dedicated players who were genuinely suffering from bad policy and not as people trying to wriggle more goodies from the government. In her battle with the music labels, in which she was criminally charged, she managed to get a reasonable order for royalties from the CRB (Copyright Royalty Board)."

Post the copyrights verdict in 2011, profitability was in sight for most FM radio companies, and Radio City, claims Purohit, grew by 12-15 per cent year on year. But soon contentment was making way for complacency. So, in 2013, Purohit challenged her team by setting a 25 per cent growth target, when the industry itself was growing at 14 per cent. "I gave everybody a sales target, including programming, HR and finance. Around 30 per cent of the incentives were linked to the organisation achieving sales targets." That year (2013/14), the company, claims Purohit, grew by 30 per cent, and has managed to sustain the growth in the consecutive fiscals, too. From being a Rs 60-crore business in 2005, Radio City became a business worth almost Rs 300 crore, in her reign.

Today, Purohit looks after a larger portfolio, which includes the group's new-age businesses such as digital, outdoor activation and, of course, radio, besides scouting for interesting acquisitions in the entertainment space. Her goal now is to scale up the various businesses of Jagran. "All the Jagran businesses are just about delivering on EBITDA margins; but scalability and growth can come only at the back of building an organisation. So, each of the CEOs needs to individually build verticals as an organisation."

Abraham Thomas, the new CEO of Radio City, is confident that Purohit will take Jagran Group to a new level. "She has the business acumen in terms of being able to understand revenue drivers and cost drivers, and therefore build a profitable, viable business," he says.

Purohit's one-point agenda as of now is to make Jagran Prakashan the most valuable Indian media company. "The Jagran businesses have to still witness the hockey stick growth that Radio City underwent," she says.