Tencent-backed Gaana and Times Internet merged with Times Group’s listed subsidiary Entertainment Network India Limited (ENIL) in December 2023 following the collapse of possible merger and acquisition negotiations with Airtel Wynk. Nonetheless, the agreement has so far escaped significant media coverage.
Notably, according to ENIL’s filings with the National Stock Exchange (NSE), Gaana was purchased for Rs 25 lakh. Bennett Coleman is the brand ambassador for ENIL, which runs the well-known FM radio station “Radio Mirchi.”
To put things in perspective, Gaana raised more than $200 million during its existence and, according to the media, was last valued at about $580 million.
The combination of Gaana with ENIL suggests that the company is in distress and has given up on finding a third party buyer. Tencent’s ownership stake in the 14-year-old platform is unclear, and there are currently few details available regarding the acquisition.
Media reports state that until September 2020, Tencent held a roughly 35% stake in Gaana, while Times Internet previously held a majority stake.
Periodically, Times Internet has also been infusing Gaana with debt in order to maintain the platform. Times Internet sent the music and podcast streaming platform a debt of Rs 100 crore in July 2023, which was later converted into equity shares.
According to Times Internet’s regulatory filings with the RoC this week, the company has now committed to investing up to Rs 10 crore in debt in Gaana. According to Yatish Mehrishi, CEO of ENIL, the company also made an investment of Rs 15 crore during the first three months of FY25.
Since its bordering companies are prohibited from making equity investments in India, Tencent, the owner of WeChat, led two consecutive $90 million debt rounds for Ganna in September 2020 and June 2021.
Gaana’s decline can also be traced to the company’s declining revenue, which plummeted by more than 80% to Rs 12.5 crore in the previous fiscal year (FY24). Mehrishi revealed Gaana’s FY24 revenue figures during a May investor conference call.
Following the purchase, Gana was entirely behind a paywall and the subscription cost was doubled to Rs 599 by ENIL. These modifications were evident in its collection, which totaled Rs 9.5 crore in the final quarter of FY24.
However, the Mumbai-based company ENIL lost Rs 5.45 crore in the first quarter of FY25, despite its consolidated operating revenue declining 25.79% on a quarter-over-quarter basis to Rs 113.46 crore.
Gaana underwent a management transition in mid-2021, replacing its longstanding chief executive officer (CEO), Prashan Agarwal, with Sandeep Lodha. In July 2023, Lodha left the company as well. Mehrishi, the chief executive officer of ENIL, is currently in charge of Gaana.
Times Internet has been selling off its portfolio and incubated companies for the past three years, during the division of Times Group assets between Samir and Vineet Jain. It paid roughly $44 million to 360 One (previously IIFL Wealth) for the sale of its subsidiary ETMoney. Since 2021, Times Internet has exited from seven subsidiaries, including this one. Times Internet sold the assets of MX Players to Amazon in June. While Swiggy purchased DineOut in May 2022, the Gurugram-based company sold MX TakaTak to ShareChat in February 2022. The three businesses that Times Internet had sold to e-commerce unicorn Mensa in that same year were MensXP, iDiva, and Hypp.
