Star to buy 20% in Radio City

MUMBAI: With the private FM radio sector opening up and foreign direct investment allowed up to 20%, Star has decided to re-enter the FM business. It will pick 20% equity in Music Broadcast (MBPL), the company that runs Radio City.

The stake will be picked up from India Value Fund (IVF), a venture capital fund, which currently holds 75% in MBPL. With Star���s investment, the fund���s holding will drop to 55%. While the deal has been agreed by both companies in principle, Star is currently seeking the FIPB approval to go ahead with the investment.

MBPL is operational in Mumbai, Delhi, Bangalore, Lucknow, Hyderabad, Chennai and Jaipur. The company also won licences in the second round of FM radio bidding and has plans to launch services in Nagpur, Surat, Ahmedabad and Baroda.

Star, which was among the earliest investors in MBPL, had exited the business in 2005 due to the stringent rules in the FM radio sector on FDI. However, with the government allowing 20% FDI equity and the implementation of the revenue sharing policy, Star has decided to make a comeback