afaqs!

Parivartan looks to DTC for outdoor solution

By Rohit Nautiyal , afaqs!, New Delhi | In OOH News | November 12, 2008
With the MCD proposing to legalise a large number of outdoor ad facilities in Delhi, the OOH arm of Jindal Stainless is concerned about its own growth

Parivartan & #BANNER1 & # City Infrastructure, the OOH arm of Jindal Stainless, won two consecutive bids by June to construct, maintain and sell media space on more than 600 bus shelters of the Delhi Transport Corp. (DTC).

The bus shelters cover the arterial routes of Delhi and DTC earns substantial revenue of about Rs 4.5 crore through outdoor ads on these shelters. Parivartan has made a considerable investment in this project and it aims to have a bigger share of the outdoor pie by dominating strategic locations with the bus shelters. But in July, New Delhi's Outdoor Advertising Policy, compiled by the Municipal Corporation of Delhi (MCD), put paid to its plans.

As a part of the new policy, MCD proposes to legalise a large number of flyover columns, building wraps, unipoles, service kiosks and other service oriented facilities. The move ushers in a huge inventory, which is large enough to eat into Parivartan's bus shelter revenue.

afaqs! spoke to a top official in Parivartan, who says, "Obviously, this move will have repercussions on our business. The actual problem is the lack of stringent regulations in the outdoor industry. Also, there may be compromises in terms of the quality of the outdoor. We choose to establish the superiority of our product and, therefore, enter into long term contracts because of the huge investments we make. MCD's outdoor policy will hamper our growth."

For the record, Parivartan spends about Rs 15 lakh on the construction of every stainless steel bus shelter.

The new legalised formats will eat into Parivartan's share of revenue from ads. This will directly impact the quarterly fee of Rs 93,800 per month per bus shelter that is paid in advance to the DTC.

The official adds, "The level of security is the broader issue with us. The project is in partnership with the government and we expect its support." He says that a cut in the concession fee being paid to the DTC may be one of many solutions, but it is too early to comment on this as yet.

Regarding the delay in the construction of the second phase of bus shelters, he says, "These are false reports. We had a meeting with RK Verma, chairman and managing director, DTC, and we put across our concerns on the sudden change of the market dynamics. DTC has asked for some time to deal with the issue."

DTC officials refused to comment, saying that the contract with Jindal Stainless is confidential.

For the record, Parivartan City Infrastructure is a nine month old company, with accounts such as HT City, Sun Direct, Airtel, Big TV, Motorola and Steel Authority of India Ltd in its kitty. Jindal Stainless, established in 1970, is the largest stainless steel conglomerate in India and the flagship company of the US$15 billion OP Jindal Group.

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