Ramoji Rao

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Chairman Mr. Ramoji Rao

Cherukuri Ramoji Rao, better known as Ramoji Rao (born 16 November 1936), is an Indian businessman and media entrepreneur. He is head of the Ramoji Group which owns, among other things, the world's largest film production facility, Ramoji Film City.^[1]

Rao cherukuri was born in Gudivada, Krishna District, Andhra Pradesh, into an 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 Rangachary Report controversy
4 $275m stake in Ramoji firm
5 References
6 External links

[edit] Ramoji Film City

Ramoji Film City is situated near Hayathnagar, about 25km from Hyderabad on the Hyderabad-Vijayawada Highway.

It is popular with film makers as well as with tourists. Nearly 100,000 tourists visit this facility every month^{[citation needed]}. Its 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 Hotels, Ramoji Film City and Priya pickles. The flagship company of the Ramoji Group is M/s Margadarsi Financiers. Ushakiron Films has produced films such as Mayuri, Pratighatana , Sitara and Nuvve Kavali .

Ramoji Group is incorporated as an HUF (Hindu United Family) concern, while various sister companies are closely held private companies. Because none of the companies is public and listed on the stock exchange, financial data is hard to obtain.

Rao claims that he is able to handle his varied businesses because he believes in delegating authority and maintaining transparency in all his deals. "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.^{[citation needed]}

[edit] Rangachary Report controversy

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The Rangachary Report, prepared by N. Rangachary, Adviser to Government, Finance Department, A.P. Secretariat, Hyderabad, makes the following allegations against M/s Margadarsi Financiers (the flagship company of Ramoji Group):

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.
A large portion of money raised through Margadarsi Financiers was invested in privately held sister companies.
The sister companies were largely dormant (i.e. had no significant business activity).
The one sister company which was active, Ushodaya Enterprises (which ran the Eenadu and ETV) was losing money.
Margadarsi Financiers will not be able to meet their obligation to repay the depositors.^[2]

The Ramoji Response claimed that:

The Rangachary Committee did not look beyond Margadarsi Financiers, especially at Ushodaya Enterprises.
The Rangachary Report is flawed.
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.^[3]

[edit] $275m stake in Ramoji firm

In one of the largest investment deals in the media sector, global private equity firm Blackstone Capital 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.^[4]

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, Rao 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 Advisers India Pvt Ltd, 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."^[5]