Reliance Industries’ big push into digital media has negatively impacted Network18’s stock price, with a 30.22% YTD drop, now at ₹49.95. Viacom18, which owns JioStar, is no longer a subsidiary of Network18, marking a significant negative development for the stock.
Now, Network18 holds only an indirect stake in Viacom18 and, by extension, in JioStar. With advertisers shifting away from legacy media, digital revenue is now the primary driver of growth, and this shift has contributed to Network18’s challenges.
Financial Performance:
Network18 reported a ₹1,435 crore loss in Q3 FY25 due to its demerger with Viacom18. Revenue from operations fell to ₹1,361 crore, a decrease from the previous year. The exceptional loss came from derecognition of subsidiaries related to Viacom18’s restructuring.
Digital Strategy & Growth:
The company’s growth in digital media is backed by Viacom18’s indirect stake in JioStar, a key player in India’s streaming and digital advertising market.
JioStar’s growth, claimed to be 50 million subscribers by Nov 2024, boosts Network18’s digital portfolio. Strong performance in online media and digital streaming ads is expected to continue supporting long-term growth.
Promoter Share Decline:
Network18’s promoter stake decreased from 75% to 56.89%, reflecting changes in ownership structure.
Retail Investor Surge:
Hoping to make big returns, retail investor participation surged, with shareholders increasing from 1.75 lakh on Sept 2024 to 5.84 lakh in Dec 2024.
Retail investors now hold 36% of the stock, signaling growing interest despite the falling stock price.
Outlook:
With increasing digital ad revenue, digital streaming services in India, and JioStar’s growth, Network18’s digital transformation is crucial for future recovery.
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