Ramoji Rao

From Wikipedia, the free encyclopedia

This article needs copy editing for grammar, style, cohesion, tone and/or spelling.
You can assist by editing it now. A how-to guide is available, as is general documentation.
This article has been tagged since January 2007.

Chairman Mr. Ramoji Rao

Cherukuri Ramoji Rao, better known as Ramoji Rao (b. 16 November 1936) is an Indian businessman and entrepreneur in the media business. He is head of the Ramoji Group which owns, among others, the world's largest film production facility called Ramoji film city. Film city is situated near Hayathnagar; about 25 kms from Hyderabad on the Hyderabad-Vijayawada Highway.

Rao was born in Gudivada, Krishna District, Andhra Pradesh, into a rich agricultural family. Some of the companies owned by the Ramoji group include Margadarsi Chit Fund, Eenadu newspaper, ETV, Priya Foods, Ushakiron Movies and as mentioned above, the Ramoji Film City near Hyderabad.

1 Ramoji Film City
2 Other businesses
3 Margadarsi battle
4 $275m stake in Ramoji firm
5 External links

[edit] Ramoji Film City

Ramoji Film City, allegedly the largest film production facility in the world^{[citation needed]} is popular among film makers as well as tourists - nearly 100,000 tourists visit this facility every month^{[citation needed]}. Its many attractions include exotic gardens, an entertainment centre where live stunt shows are enacted, and a ride that simulates space travel.

[edit] Other businesses

Some well known brands/companies of Ramoji Group include Eenadu, ETV, Ushakiron Movies, Dolphin Group of Hotels, Ramoji Film City and Priya pickles. The flagship company of the Ramoji Group appears to be M/s Margadarsi Financiers. Ramoji Group is incorporatd as a(n) HUF (Hindu United Family) concern while various sister companies are closely held, private companies. Since none of the companies is public company and hence not listed on stock exchange, financial data is hard to obtain. Ushakiron Films has produced films such as Mayuri, Pratighatana, and Sitara.

Ramoji Rao is able to handle his varied businesses because he believes in delegating authority and maintaining transparency in all his deals. And because he knows that there is no substitute for hard work. "I set a goal and then go ahead with dogged determination till I've accomplished what I set out to achieve", he said in a recent interview with the Financial Times, Hyderabad.{{cn|date=March 2007}

[edit] Margadarsi battle

The Rangachary Committee Report Rangachary Report, prepared by Shri N. Rangachary, Advisor to Government, Finance Department, A.P. Secretariat, Hyderabad, makes the following allegations against M/s Margadarsi Financiers (flagship company of Ramoji Group): a) Out of the total deposits of Rs. 2,610.38 crores as on 31 March, 2006, Rs. 1369.47 crores are irretrievably lost by way of losses, which works out to more than 50% of the borrowings, b) A large portion of money raised thru Margadarsi Financiers was invested in privately held sister companies, c) the siser companies were largely dormant (i.e., had no significant business activity), d) the one sister company which was active, Ushodaya Enterprises, (which ran the Eenadu and ETV) was losing money, and, e) Margadarsi Financiers will not be able to meet their obligation to repay the depositors.

The Ramoji Group Ramoji Response responded that a) the Rangachary Committee did not look beyond Margadarsi Financiers, especially at Ushodaya Enterprises, b) that Rangachary report is flawed, and, c) among other things, the fact that the Blackstone Group chose to invest Rs. 1,217 Crores in Ushodaya Enterprises was a signal of their group's financial strength and solvency.

As the events unfolded, over a month after the allegation Reserve Bank of India, which had investigated the alleged banking activities of Margadarsi Financiers, finally advised them, a Hindu undivided family or HUF, not to accept any fresh public deposits or renew matured deposits, as it is an unincorporated body. It was also urged to put in place a mechanism to monitor the assets of the HUF so that they are not eroded, compromising its capacity to discharge its obligations to its depositors.[1]

The CID police officials on 22nd Feb have discovered benami transactions worth crores of rupees in the name of alphabets in Margadarsi.

[edit] $275m stake in Ramoji firm

In one of the largest investment deals in the media sector, global private equity firm Blackstone Capital Blackstone Group has acquired around a 26 per cent stake in Ushodaya Enterprises Ltd (UEL), the holding company that runs Andhra Pradesh's Eenadu group, for $275 million. It also gets a seat on its board.^{[citation needed]}

UEL has announced on 27 February 2007 that its Board of Directors had approved an agreement with the Blackstone Group wherein the latter and its affiliates would acquire a stake in it. As part of this transaction, UEL expects to raise $465 million comprising a $275 million investment by Blackstone and $190 million of bank financing. Other terms of the deal were not disclosed. The transaction is subject to regulatory approval by the Foreign Investment Promotion Board and the Ministry of Information and Broadcasting. Kotak Investment Banking acted as the sole investment banking adviser to the transaction, according to a press release from the UEL.^{[citation needed]}

Reacting to the development, Ramoji Rao, UEL chairman, said: "We were impressed with Blackstone's disciplined and highly rigorous investment process and the ability to combine this emphasis with a deep and genuine respect for the promoter's interests."^{[citation needed]}

He said the company had access to several financing options, including an IPO. "But we decided to go with Blackstone because we believe that at this stage of our growth we have an opportunity to create significant value by leveraging Blackstone's outstanding experience and track record in the global media sector."^{[citation needed]}

Akhil Gupta, chairman and managing director of Blackstone Advisors India Private Limited, said: "We believe that the Indian media sector will be a key beneficiary of a secular trend in growth in personal consumption that is driving India's economic expansion." This in turn would spur advertising growth and the UEL would be an ideal platform for Blackstone to play on this highly attractive sector in India, he added.[2]