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The divestment will be completed in a week or two. The company is roping in three or four global institutional investors to buy the stake. The 5 per cent stake is valued at around Rs 300-400 crore (Rs 3-4 billion).
However, a Reliance ADAG group declined to comment on the issue when contacted.
ADAG plans to consolidate its media and entertainment business through Reliance Entertainment. This includes movie production, television broadcasting, music, video, the distribution and exhibition business, direct to home and even the net business.
The cash earned through divestment will fund the company's aggressive expansion plans in this area.
The game plan is to become a media company along the lines of the likes of Walt Disney, with interests across cinema, TV, entertainment, gaming and the net. The entire entertainment and media business will be carried out under the Big brand.
The group has already decided to get into the movies business in a major way through Big Motion Pictures, a subsidiary of Reliance Entertainment. Plans are afoot to produce and finance over 100 films in the next three years.
It has already signed up or is in the process of signing up 30 movies which will be produced in the next 18 months. The investment in the movies business is expected to be to the tune of $100 million.
The company is also planning to get into TV broadcasting and hopes to roll out its first few channels by mid-2008. These will range from entertainment to news. It is likely that the broadcasting foray will be ,launched with a movie channel.
Reliance is also in talks with Big Wheel which runs the famous London Eye giant wheel, to collaborate to build similar entertainment structures in India. The target is to start one such giant wheel in Delhi during the Commonwealth Games.
In the distribution area, Reliance aims to expand its DVD/VCD rental business through Bigflicks which will have over 500 stores across the country in 2008-09. Bigflicks will also be available through the net, to enable customers to download movies for a monthly fee.
The company has also entered the internet business through the launch of social networking site Bigadda.com.
A couple of years ago, ADAG bought over Adlabs movie production and exhibition company and now it is planning a major expansion in these areas also.
Reliance Entertainment will face tough competition from companies like Television 18 group and UTV that are also expanding in the entertainment and media arena.
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