Billionaire Indu Jain’s Bennett, Coleman & Co. plans to give stock options to employees in preparation for a potential initial public offering in India in the next two years, said three people with direct knowledge of the matter.
Some senior staff at the Mumbai-based publisher of the Times of India and Economic Times were told about the stock options last week, said two of the people, who declined to be identified because there hasn’t been a formal announcement. Bennett, Coleman Chief Executive Officer Ravindra Dhariwal yesterday declined to comment.
An IPO by the publisher of the world’s largest English daily would allow investors to tap revenue growth in Indian newspapers even as U.S. and European rivals face declines in advertising sales. The Asian nation’s newspaper market, which has more readers than the U.S. population, may expand 6.8 percent annually, PricewaterhouseCoopers forecast last year.
“Overall media spends have been pretty buoyant” in India, Chennai-based Aashish Upganlawar, an analyst at Spark Capital Advisors Pte., said by telephone today. “As people spend more on consumption like automobiles, education and real estate, we are looking at higher spends in the smaller towns too.”
Bennett, Coleman may compensate employees with cash if the shares aren’t listed by Dec. 31, 2015, according to an internal document obtained by Bloomberg News. The options, which offer employees the right to buy shares at 446 rupees ($9.80) each, will vest over four years from the date of the grant, it said.
India’s newspaper publishing market, which has 356 million readers, may expand 6.8 percent annually to $4.1 billion by 2014, PwC said in a report last year. The Times of India has 7 million readers, it estimated.
U.S. newspaper circulations continued to decline in the six months through September, with the average daily circulation for 635 newspapers falling 5 percent from a year earlier, according to Audit Bureau of Circulations data released in October. The Wall Street Journal had the highest weekday circulation of 2.06 million, while USA Today was second at 1.83 million and New York Times was No. 3 with about 876,600, it said.
New York Times Co., publisher of the namesake newspaper and the International Herald Tribune, on Feb. 3 reported a 26 percent decline in profit for the fourth quarter as print advertising and circulation revenue shrank.
Blackstone Group LP, the world’s biggest private-equity firm, in April said it planned to invest 2.25 billion rupees in Jagran Media Network Pvt. to benefit from a surge in readership in India. A unit of Jagran Media prints the Hindi-language Dainik Jagran, the nation’s most-read daily with 16.3 million readers, according to PwC.
The Times of India is the world’s largest broadsheet English daily and the group’s Economic Times is the second- largest financial newspaper, according to the website of the company’s Times Internet affiliate. Bennett, Coleman also has television, radio and advertising assets.
Jain’s net worth is $3.1 billion, according to a Forbes ranking in September.
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