Hinduja Group owners involved in a dispute

It takes generations and sometimes eternity to build a fortune but, it takes one hard feeling or one wrong step to destroy it. Crisis Management and Conflict Resolution are some characteristics that can prevent the hard-earned wealth from getting wasted. If there is a dispute between partners and they wish to divide the wealth (or basically divide the businesses) in that case wealth would remain the same but the business loses advantages of synergy. Read on to find out why we are telling you all this.

Hinduja Group, which is one of the biggest and most popular Indian conglomerates is dealing with a precarious situation. Owners of the group, the four brothers (Hinduja brothers) who have created a fortune of more than $50 billion are vying over the ownership of Geneva based Hinduja Bank. Until now, the group was following a simple fundamental regarding ownership ‘everything belongs to everyone and nothing belongs to anyone’. But, a letter written in 2014 has turned the tables.

What’s the Matter?

The dispute we are talking about is not a simple or any other family dispute. It’s about the foundation of an empire that is 105-year-old. Hinduja Group is into automobile, healthcare, telecommunications, financial services, defence and various other businesses, and these businesses are located in 48 different countries. Now, the Hinduja Bank (which is located in Geneva) is at the heart of this dispute.

According to SP Hinduja, the eldest among Hinduja brothers, the letter written in 2014 which states that all the assets held by one brother belong to all four of them, should be nullified. This simply means that he doesn’t want to consider that letter as a legal document which also means in other words that he wishes to keep the Hinduja Bank to himself and not share its ownership. His younger daughter Vinoo is helping him in the legal proceedings, acting as his ‘litigation friend’. By the way, a court of England has ruled in favor of SP Hinduja.

Coming back to where we started from, after setting up a legacy and building a fortune, it seems like the Hinduja Group is up for a split. Even if the wealth remains the same, the business would surely lose out on the advantage of synergy which will surely be visible in future. One way of looking at this is, competitor’s are in search of moments to capitalize and such moments can turn out to be absolutely game-changing. Now, where would this dispute lead Hinduja Group to, we’ll have to wait and watch.

TV Today Network Limited (TVTN)

TV Today Network Limited is one of India’s leading Hindi-English television network. It was started as a TV Today division in 1994 as a wing of India Today group which began its journey with the launch of India Today magazine in 1975. It is one of the most known and reputed media conglomerates with a legacy of 45+ years in India.

It has diversified its business into multi-brand, multi-platform, and multi-vertical media group since its inception. The group publishes the nation’s No. 1 magazines and command leadership status covering various segments of the audience with preferences such as English, Hindi, Business, and International, etc.

TVTN operates in various segments namely television, digital media, and radio broadcasting. Its subsidiaries include TV Today Network (Business) Limited and Mail Today Newspapers Private Limited. TVTN operates five news channels, namely Aaj Tak, Aaj Tak HD, India Today, Tez and Dilli Aaj Tak, and three FM radio stations under brand ISHQ 104.8 FM in Delhi, Mumbai and Kolkata. The firm has established its digital footprint through its Aaj Tak and India Today websites and social media handles. It has reached an average monthly coverage of 276 million during FY19.

Aaj Tak was started in the year 2000 as a half-hour daily news & current affairs program on Doordarshan. With the use of innovative technologies (use of drones, tele-interviews, etc) and differentiated style of news coverage, it grew to become the most-watched 24hrs news channel and maintained its leadership position since last 19 years in a row.

Being a viewer centric network, it pioneered a list of programs targeting various happenings in the country such as Agenda Aaj Tak, Safaigiri, Sahitya Aaj Tak, Salaam Cricket, Budget Aaj Tak and Panchayat Aaj Tak resulting in a loyal audience. According to the audience measurement system, BARC, it enjoyed leadership with the market share of 17.3% in FY19 in Hindi news channels segment. This share has reached up to 21% during major event happenings in India such as 5 state elections & results, the demise of Atal Bihari Vajpayee, Amritsar train tragedy, Pulwama attack, and many more during the same period.

As far as digital penetration is considered, Aaj Tak became the world’s first YouTube news channel to achieve a milestone of 10 million subscribers, beating international brands as well. Currently, its YouTube subscriber base has crossed 39.1 million mark. In terms of followers, there are 4 Million followers on Instagram, 10.3 million on Twitter and its Facebook page has crossed 24 million likes. It has become No.1 Hindi news brand across platforms including television, web, mobile, and social media.

To cater to the needs of the tech-savvy or younger audience while maintaining the trust and respect of the Indian Today brand, Headlines Today was launched in 2003 which was renamed as India Today TV at a later point in time. This English news channel is growing continuously and made to top 3 channels with a market share of ~17% by viewership. With the objective of providing Hindi news to time-conscious people, Aaj Tak Tez was launched which proved to be of great success. It has launched a host of other channels in local languages to increase its reach.

By drawing inspiration from apps and innovations in digital space, it transformed news broadcasting via innovative content and in multiple formats across various platforms. The network has launched a portfolio of digital channels under the umbrella of Tak.live with a focus on creating video content for mobile viewers. Also, the channel is bestowed with an enviable array of award-winning reporters, editors, and anchors ensuring prime news content delivered to its audience effectively.

The media and entertainment industry is highly fragmented but the majority of market share is enjoyed by the top 6 players. The competition was further intensified with the entry of the Republic Bharat in an overcrowded Hindi news market in February 2019. The company earns the majority of its revenue from advertisements from BFSI, automobiles, FMCG, and the political sector.

The flagship channel Aaj Tak is operating at 100% capacity and running 16 minutes ads per hour with yield in the range of ₹ 6000-7000 per 10 seconds. The utilization of India Today TV channel stood at 69% with ads running for 11 minutes per hour with a yield up to ₹ 2000 per 10 seconds. The network was successful in leveraging the power of digital and social media to broadcast its quality news content and maintain its viewer's loyalty.

Also, the market share of Aaj Tak has grown to ~25% in the Hindi news segment owing to coverage during the spread of COVID-19 followed by nationwide lockdown which kept the audience near to news channels. It can be expected to see a decline in advertisement revenue but an increase in operating profit margins in FY21 given some administrative and other cost savings.