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DSP's Kothari, Ajay Piramal have FM channel pie

Savio G Pinto & Arijit De in Mumbai

What happens when a merchant banker, an industrialist and a creative whiz kid come together? They form an FM music channel.

The owners of Win 94.6, the new FM music channel, happen to be merchant banker and stock broker Hemendra Kothari of DSP Merrill Lynch, pharma takeover tycoon Ajay Piramal and radio personality Gautam Radia, the managing director of Millennium Broadcast.

While Kothari and Piramal are the actual financiers of the channel, with stakes of 60 per cent and less then 30 per cent, respectively, the day-to-day affairs is run by Radia.

Both Kothari and Piramal are hands off investors. Sources close to Kothari say his investment in the FM channel was not motivated by financial returns but because of a close equation with Radia.

But not so in the case of Piramal though, who said: "The investment is driven purely by financial considerations. I feel it is an investment with good potential." Piramal is happy to be a "sleeping partner" and feels confident about letting Radia and Kothari oversee the business.

But what exactly would the investments add up to? According to analysts and industry experts, the cost of setting up a radio channel could be anywhere in the region of Rs 250-300 million.

For starters, the licensing fee stands at a formidable Rs 97.5 million which is estimated to be just 30 to 35 per cent of the total cost involved in setting up a radio station.

After considering advertising costs, infrastructure costs, equipment and staff cost, rent for the premises, and other add-ons the investment runs into a figure not everyone can scoff at.

So if one has to work backwards, Kothari would have invested a cool Rs 150 million, while Piramal may have invested somewhere around Rs 70-80 million.

Win 94.6 hit the airwaves in the metropolis in May 2002 and is one of Mumbai's most trendy FM radio channels.

Radia was the CEO of MBC Networks in Colombo in Sri Lanka and has successfully operated three 24-hour FM radio channels in Tamil, English and Sinhalese for three years before returning to India to launch and operate Win 94.6.

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