| Music Broadcast Limited | ||||||
| Ratings reaffirmed at 'Crisil AA/Stable/Crisil A1+' | ||||||
| Rating Action | ||||||
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| Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||||
| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale Crisil Ratings has reaffirmed its ‘Crisil AA/Stable/Crisil A1+’ ratings on the bank facilities and preference shares of Music Broadcast Ltd (MBL).
The ratings continue to reflect the managerial, operational and financial linkages with the parent, Jagran Prakashan Ltd (JPL; ‘Crisil AA+/Stable/Crisil A1+’), healthy market position of MBL in the FM radio broadcasting industry and its strong financial risk profile. These strengths are partially offset by susceptibility to economic cycles, competition and industry headwinds.
The operating performance of MBL is reflected in stable revenue of Rs 235 crore in fiscal 2025 compared with Rs 229 crore in fiscal 2024, but a decline in operating profitability to 12% from 16% because of increased employee expenses to expand the digital segment.
The digital and non-free commercial time (FCT) segment will drive growth in revenue and profitability this fiscal and over the medium term. The sustenance of profitability, along with growing revenue, will be monitorable as the radio industry continues to face headwinds as the digital space grows.
The financial risk profile will remain healthy as reflected in the expectation of negligible debt post the redemption of preference shares in fiscal 2026 and healthy cash balance over the medium term. Cash and equivalents stood at Rs 349 crore as on March 31, 2025.
The parent, JPL, maintains a healthy business risk profile and a robust financial risk profile through its negligible debt and healthy cash balance.
Crisil Ratings continues to be cognizant of the ongoing litigation among the promoters of JPL. Mr Mahendra Mohan Gupta (Chairman of JPL), along with Mr Shailesh Gupta (whole time director of JPL) and VRSM Enterprises LLP (collectively, the petitioners), had filed an oppression petition before the National Company Law Tribunal, Allahabad, on July 10, 2023. The petitioners have 16.18% shareholding in Jagran Media Network Investment Pvt Ltd (JMNIPL), which holds 67.97% shareholding in JPL. The petitioners’ indirect and direct shareholding in JPL aggregates to 11.29%. The shareholding of JMNIPL is completely held by the members of the Gupta family, which includes the petitioners. The petition raises issues concerning oppression of the minority shareholders, that is, the petitioners, by the majority shareholders, that is, the other members of the Gupta family, both at the JMNIPL and the JPL levels. However, the petition does not allege any mismanagement in the affairs of JPL.
Crisil Ratings understands that the ongoing litigation among the promoters is unlikely to have any material financial implications and should not have any material impact on the credit risk profiles of the group companies — JPL, MBL and Midday Infomedia Ltd (MIL) — that are rated by Crisil Ratings. However, Crisil Ratings will continue to closely monitor developments around the same. Any adverse outcome impacting the credit risk profiles of the rated entities will remain a key rating sensitivity factor.
MBL had completed the bonus issue of around Rs 90 crore of non-convertible redeemable preference shares to its non-promoter shareholders during the quarter ended March 31, 2023. These are to be redeemed by the end of fiscal 2026 with a redemption premium of ~Rs 18 crore. Crisil Ratings understands that MBL will pay the preference share dividend as well as the redemption amount in a timely manner. |
Analytical Approach Crisil Ratings has considered the standalone financials of MBL and has applied its parent notch-up framework to factor in the strong operational, financial and managerial linkages between MBL and JPL. |
Key Rating Drivers & Detailed Description Strengths:
In the past, JPL had facilitated the issuance of non-convertible debentures by providing a corporate guarantee to MBL, and later replaced it with a letter of comfort. JPL also offered liquidity support through a debt service reserve account, covering six months of debt obligation. The extensive experience of JPL’s management in the media and entertainment business will continue to strengthen the business risk profile.
The financial risk profile will remain supported by strong liquidity with cash and liquid investments of ~Rs 349 crore as on March 31, 2025, which is sufficient for the redemption of preference shares of ~Rs 108 crore at the end of fiscal 2026. The financial risk profile should remain healthy over the medium term, driven by improvement in cash accrual.
Weakness:
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Liquidity: Strong Liquidity is supported by cash and liquid investments of around Rs 349 crore against debt of around Rs 100 crore as on March 31, 2025. Capital expenditure (capex) is expected to remain moderate. Furthermore, MBL has high financial flexibility and can get support from its parent, JPL, in case of any exigencies. |
Outlook: Stable MBL will continue to benefit from the healthy market position of Radio City, strong liquidity and linkages with JPL. |
Rating sensitivity factors Upward factors:
Downward factors:
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About the Company MBL was the first private FM radio broadcaster in India. It operates FM radio channels under the Radio City brand. In fiscal 2016, the company acquired 11 new stations in batch I of FM phase III auctions. Also, eight radio stations under the Radio Mantra brand, operated by the promoters of JPL under Shri Puran Multimedia Ltd, were merged with MBL and rebranded as Radio City in fiscal 2016. The company is present in 39 cities across India. . It also operates 2 web-based stations. |
About the Group The JPL group is a media conglomerate with interests spanning printing and publication of newspapers and magazines, FM radio, digital, outdoor advertising and promotional marketing, event management and activation businesses. JPL is the flagship company of the JPL group that is based in Kanpur, Uttar Pradesh. The group publishes eight publications from 13 states/union territories in five different languages. JPL acquired MIL in a 2:7 equity-swap ratio in fiscal 2011. In fiscal 2016, the JPL group acquired MBL, which has grown to 39 stations and 2 online stations. |
Key Financial Indicators
The table above reflects Crisil Ratings-adjusted numbers |
Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
# Yet to be issued |
| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||||||
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Criteria Details
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