World Newspaper Congress 11: Session Opportunities, Ravi Dhariwal

63rd WORLD NEWSPAPER CONGRESS

Session: Opportunities Title: Building Brands’ CapitalSpeaker: Ravi Dhariwal

Vienna, Reed Messe Wien

Mark your calendar

64th WORLD NEWSPAPER CONGRESS19th WORLD EDITORS FORUM

www.wan-ifra.org/kiev2012

Building Brands’ CapitalPartnering Entrepreneurs

Ravi DhariwalTHE TIMES OF INDIA

India: Prospect

US UK China India

0,47%0,54%

0,95%

1,34%Advertising Spends:

GDP ratio 2009

Source: KPMG-FICCI Frames 2009

India: Advertising Prospect

• Even established companies under-advertiseo < 5% of listed companies

spending 10%+ of revenue on advertising

• New entrepreneurs cash strapped

Source: CMIE

• TOI provides advertising & strategic input

• Shares business risksBrandCapital

• Preserves Cash

Brand Capital - Addressing the Paradox

Need for a brand

Limited Resources.

Business enterprise

Multimedia Platforms : National

Largest TV News Company

Largest Out-Of-Home Company

Among Top 5 Indian Internet Cos.

30% Share of Radio Ad Spend

33% Share of Print Ad Spend

22% Share of Overall Ad Spend

Types of Deal Structures

Equity Structure– 3-5 years of ad spends : Exchanged for Equity

Asset Structure– 2-3 years of ad spends: Exchanged for Assets

Performance Contracts Structure– 1-2 years of ad spends : Performance Based

Business Structure I – Equity Listed

Brand Capital Deal

33% in cash“Pay as you go"

with every ad

67% in equity

7

Business Structure II – Real Estate

Brand Capital Deal

33% in cash“Pay as you go"

with every ad

67% in real estate asset

8

Business Structure III – Numerator

Brand Capital Deal

60% in cash“Pay as you go"

with every ad

40% performance

-linked

9

Role of Brand Capital

*Indicative ratios

Strategic Finance Advice

Strategic Marketing Direction

Brand Finance

0% 13% 25% 38% 50%

50%

33%

17%

Contribution*

Challenges• Valuing equity of unlisted companies

o Promoters high on expectationso Few benchmark transactionso Many PE funds, too few companies

• Promoters reluctance to part with equityo Not comfortable with dilutiono Equity most expensive funding

• Exit routes of unlisted companieso Low demand for unlisted companieso IPO process stretched on implementation time

• Corporate governance of unlisted companies o Promoters exposed to external investors for the first timeo Corporate governance standards not up to speed

www.brandcapital.co.in 12

Many Brands – One Brand Capital

Category with players like P&G and J&J, 99% ad spends in TV

Case Studies: She

She Comfort is now ranked # 3

Case Studies: MCX

Pitted against well-established first mover

MCX is now India’s #1 &Asia’s #4 Derivatives

Case Studies: Thyrocare

Start-up in a low-involvement, no advertisement category

Case Studies: Big Bazaar

Heavy competition, high investment category

Case Studies: Mercedes Benz

Growing segment, new entrants

Brand Capital – Scale

• Portfolio 350+ companies with deal value of US$ 1 billion

• Contributed between 15% of total BCCL ad revenue over the last 4 years

• Proven success stories leading to repeat deals

Investments by Industry

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Thank Youhttp://brandcapital.co.in/

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