Adlabs to hive off radio business

Adlabs Films is considering spinning off its radio business into a separate company.

Sources close to the development said the plan to spin off Adlabs Radio, the wholly-owned subsidiary of Adlabs Film, into a separate company was aimed at ensuring a focussed approach to the booming radio business. Adlabs Films would take nearly six months to separate its radio arm.

Manmohan Shetty, chairman and managing director, Adlabs Films, declined to comment.

Adlabs Films, a part of the Reliance-Anil Dhirubhai Ambani Group, last month, launched a special purpose vehicle for its FM radio foray and sought government clearance for the same. Adlabs Films bagged a total of 45 radio licences across cities and is poised to be one of the biggest players in the FM.

The SPV was named Adlabs Radio Private and the corporate entity and the official licence was retained with Adlabs Films. Adlabs Films focuses more on the multiplex and the post production business.

R-ADAG is looking at a capital expenditure of Rs 1-5 crore (Rs 10-50 million) per station depending on the city, and operational expenditure will vary from Rs 50 lakh (Rs 5 million) to Rs 5 crore (Rs 50 million) per station.

The FM radio venture of the R-ADAG should be operational in the next 6-8 months. Adlabs Radio is looking at growth in the radio business from B-class towns and hence the ADAG group would be looking at investing an appropriate model in smaller towns.

Tarun Katial joined as CEO of Adlabs Radio. He was associated with Sony Entertainment Television prior to joining Adlabs.

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