Media & Entertainment According to Industry sources, the Indian Media & Entertainment (M&E) industry grew at an annual growth rate of 12% from Rs. 65,200 crores in 2010 to Rs. 72,800 crores in 2011.The industry is estimated to grow at a rate of 12% to touch Rs. 82,300 crores at a CAGR of 14.9% to reach Rs. 1,45,700 crores by 2016, backed by strong competition in Tier 2 and 3 cities, continued growth of regional media and fast growing media businesses. Deal activity in the M&E sector witnessed a significant uptrend in 2011 with 42 transactions valued at USD 940 million as compared to 27 transactions valued at USD 693 million in 2010 and 27 transactions valued at USD 722 million in 2009. The private equity funding in the M&E sector saw an increase in both volume and value from 2010. Marquee transactions in recent past included The Walt Disney Company’s acquisition of an additional 41 percent stake at a value estimated to be over USD 300 million in UTV Software thereby taking its total shareholding in UTV to approximately ~90 percent, Providence Equity Partners’ PE investment in UFO Moviez India Ltd. (USD 58 million), and PVR Ltd's acquisition of 69.27% stake in Multiplex chain operator Cinemax for Rs  394.98 crore. The M&E sector with increasing focus on digital delivery system, changing business models and search for profitability is likely to see a lot of consolidation activity in the short to medium term. In addition, there is likely to be increased PE interest as the demand for funding increases in line with growth. The basic parameters of demand i.e. rising levels of income, demographic trends, and  growth in advertisement remains in place for encouraging sector growth in India. We at sapphire with our deep sector expertise are well equipped to take part in the growth.

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