Stock jumps 5% after the company bought stake in Pocket Aces worth ₹15Crs

Published 20-01-2025, 01:45 pm
Stock jumps 5% after the company bought stake in Pocket Aces worth ₹15Crs

YouTube has become a dominant platform for entertainment, education, and content creation, with an increasing number of users gravitating towards short-form content like web series, mini-series, and content-rich videos. These bite-sized videos are gaining popularity due to their quick consumption nature, catering to the fast-paced lifestyle of today’s viewers.

Creators are capitalizing on this trend, producing high-quality short videos that engage audiences and keep them coming back for more. The platform’s algorithm also promotes such content, enabling creators to reach a wider audience, further fueling its growth.

Future Growth Potential and Scope

The growth potential of YouTube content, especially short-form series and mini-series, remains significant. As mobile internet penetration increases globally, more users are turning to YouTube for entertainment. With advancements in video production technology and a rise in monetization opportunities for creators, the demand for engaging, high-quality short content is set to grow. As brands also leverage YouTube for advertising, the future of this content-rich ecosystem looks promising, with continuous innovation and evolving viewer preferences driving its success.

Share Price

The shares of Saregama India Ltd (NS:SARE) are currently trading at Rs. 543 up by 4.07% from its previous close of Rs. 522.2. The stock also hit an upper circuit of 5% by going up to the price of Rs. 549.5 as of January 20, 2025.

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Overview of the Acquisition

Pocket Aces Pictures Private Limited (PAPPL) is a prominent player in the digital entertainment space, known for its focus on youth-oriented content. The company, which was incorporated on December 10, 2013, has gained significant traction for producing a variety of content across digital platforms, including web series, sketches, music videos, and reels. It boasts a rich IP catalog of over 3,000 content pieces across its popular channels such as Dice Media, FilterCopy, Nutshell, and Gobble, and releases more than 30 new content pieces daily.

The company has seen robust financial performance, with a turnover of Rs. 8,859.17 Lakhs for FY24. Its subsidiary, Clout, manages over 100 digital talents, and its long-form studio, Dice Media, is known for creating youth-centric content across major OTT platforms such as Netflix (NASDAQ:NFLX), Hotstar, and Amazon (NASDAQ:AMZN).

Acquisition Details and Shareholding Increase

The recent acquisition by Saregama India Ltd. has increased its shareholding in Pocket Aces. The company’s investment has increased its stake in Pocket Aces from 51.82% to 53.51%, following the allotment of 25,975 equity shares on a rights basis. The face value of the shares is Rs. 10 each, and the purchase price, including a premium of Rs. 5,765 per share, totals Rs. 15,00,05,625. Industry and Business Operations

Strategic Importance of the Acquisition

The acquisition holds strategic significance for the parent company as it solidifies its position in the digital content ecosystem. By increasing its stake in Pocket Aces, the parent company aims to enhance its influence in the growing digital entertainment market and further leverage Pocket Aces’ capabilities

Financial Impact and Future Growth

Pocket Aces’ financial performance has shown consistent growth over the past few years, with a turnover of Rs. 8,859.17 Lakhs for FY24, a slight decline from Rs. 10,267.93 Lakhs in FY23. The company’s turnover remained stable between FY22 and FY24, and the acquisition is expected to further drive profitability through enhanced content monetization and brand partnerships.

About the Company

Saregama, established in 1902 as the “Gramophone Company of India” and later known as “HMV,” is India’s oldest music label company. Over the years, it has evolved into a diversified entertainment powerhouse, transitioning into a pure-play content company in response to the global consumption boom.

The company is renowned for its diverse intellectual property (IP) offerings, spanning music, films, web series, short-format content, and TV serials, delivered across digital and physical platforms. Saregama owns nearly 50% of all music ever recorded in India, making it a key player in the industry. Since 2017, Saregama has gained prominence with the launch of the innovative Saregama Carvaan and Yoodlee

Films, marking its significant strides in digital and content-driven entertainment.

Written By: Dipangshu Kundu

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The post Stock jumps 5% after the company bought stake in Pocket Aces worth ₹15Crs appeared first on Trade Brains.

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