Radio Mirchi's Operator ENIL Acquires Gaana For Rs 25 Lakh

Following the collapse of potential merger and acquisition talks with Airtel Wynk, Gaana - backed by Times Internet and Tencent was consolidated with Times Group’s listed subsidiary Entertainment Network India (ENIL) in December 2023. 

Gaana was acquired for Rs 25 lakh, according to ENIL’s filings with the National Stock Exchange (NSE). ENIL, promoted by Bennett Coleman is known for operating the FM radio brand ‘Radio Mirchi.’

For context, Gaana had raised over $200 million throughout its existence and was last valued at approximately $580 million, according to data.

Gaana’s consolidation with ENIL suggests a distress sale, signalling that the company has abandoned hopes of a third-party acquisition. The specifics of the acquisition remain limited and there is no clarity yet regarding Tencent’s stake in the 14-year-old platform.

Times Internet previously held a majority stake in Gaana while Tencent owned around 35 per cent until September 2020, as per data.

In July 2023, the music and podcast streaming service received a Rs 100 crore debt infusion from Times Internet which was later converted into equity shares.

Recently, Times Internet committed to injecting up to Rs 10 crore in debt into Gaana as indicated by its regulatory filings with the RoC this week. Yatish Mehrishi, CEO, ENIL revealed that the company also invested Rs 15 crore in the first quarter of FY25.

Due to restrictions on equity investments in India from companies in bordering countries, Gaana secured back-to-back debt rounds worth $90 million led by Tencent in September 2020 and June 2021.

Gaana’s decline can be further observed in its revenue, which plummeted by over 80 per cent to Rs 12.5 crore during FY24, as disclosed by Mehrishi during an investor call in May.

Following the acquisition, ENIL placed Gaana entirely behind a paywall and doubled the subscription fee to Rs 599. These changes were reflected in its collections in the last quarter of FY24 which amounted to Rs 9.5 crore.

Meanwhile, ENIL's consolidated operating revenue dropped by 25.79 per cent quarter-on-quarter to Rs 113.46 crore, with the company recording losses of Rs 5.45 crore in Q1 FY25.

Gaana also underwent a management shake-up with its longtime CEO, Prashan Agarwal being replaced by Sandeep Lodha in mid-2021. Lodha stepped down in July 2023 and Gaana is currently being managed by Mehrishi.

Amid the division of Times Group assets between Samir and Vineet Jain, Times Internet has been divesting its portfolio and incubated companies over the past three years. In June, Amazon acquired the assets of MX Player from Times Internet. In February 2022, the company sold MX TakaTak to ShareChat while DineOut was acquired by Swiggy in May 2022. Additionally, Times Internet sold three companies—MensXP, iDiva, and Hypp to ecommerce roll-up unicorn Mensa in the same year.