Update: Web18 plans to raise Rs. 2 billion (around $40.5 million) through private placement, according to sources quoted by Indiantelevision.com. So the ADR is out the window; some reports had valued Web18 at $1 billion, though that must have reduced considerably. So are their investors looking for an exit?
Web18 has reported an alarming increase in losses for the second quarter of FY09 – Net Loss after Tax was Rs. 24.71 crores, up from the Rs. 8.1 crores they posted last quarter. Operating losses were as high as Rs. 18.98 crores as operating expenses almost doubled to Rs. 34.24 crores, up from Rs. 18 crores in Q1. Operating losses in Q1 had been less than a third, at Rs. 5.595 crores. In comparison, revenues grew marginally quarter on quarter at 16 percent – to Rs. 15.68 crores from Rs. 13.15 crores.
Interestingly, Web18 has also stated that they’re writing off aggressive marketing costs from Q2. But why such huge spends?
Web18 is clearly making a dash for marketshare, and this is reflected in some changes they made over the last couple of weeks.
They’ve claimed the number 2 spot in India (according to Comscore) for In.com. Since then, they have begun transferring their other properties to the In.com domain. Now that even CricketNext and IBNLive have been transferred, I won’t be surprised if financial verticals, including their cash-cow MoneyControl, are next. It’s like putting all your eggs into one basket, and I wonder if they’re risking losing all the incoming links accumulated over the years, their pagerank, and consequently search traffic? Harakiri.
This is a clear attempt at claiming the number one spot for In.com, though the statistics would not be truthful, since the traffic be indicative of Web18 properties, not just In.com, separately. Advertisers would know that, right?
In.com claims to have a registered base of over 1.5 million users, over 3 million page views and over 500,000 visits a day.
Moneycontrol mobile claims to have 2.7 million pageviews in a month, with 250,000 unique visitors, as of September 2008. During the quarter, Web18 launched WAP sites for Moneycontrol (July18th), Tech2 (Oct3rd) Cricketnext (Aug 10th) and IBNlive (Aug15th).
IPO Plans Shelved; To Raise Money Via Private Placement?
A TV18 source has told Indiantelevision.com that the IPO plans have been shelved, which isn’t surprising, given the current market conditions. The company apparently plans to raise money via private placement. We’ve contacted Web18 for a confirmation.
Brokerage Plans Fall Through
TV18 had entered into a joint venture (JV) through Web18 Holdings Ltd (Cayman Islands), with Ambit Corporate Finance and the former Centurion Bank of Punjab, for entering the Securities broking business. The group has since decided to exit the JV. Note that Centurian Bank of Punjab was merged with HDFC Bank earlier this year. More here (pdf)
Disclosure: I own a small number of shares of Network18