B.A.G. Convergence
- B.A.G. Convergence is coming out with an initial public offering (IPO) of 56,00,000 equity shares in a price band of Rs 82-87 per equity share.
- The issue will open on September 30, 2025 and will close on October 3, 2025.
- The shares will be listed on SME Platform of NSE.
- The face value of the share is Rs 10 and is priced 8.20 times of its face value on the lower side and 8.70 times on the higher side.
- Book running lead manager to the issue is Inventure Merchant Banker Services.
- Compliance Officer for the issue is Kriti Jain.
Profile of the company
The company was founded with the vision of becoming a key player in the digital media space. Started its journey in 2007 with the launch of its first website, news24online.com. Soon after, the company introduced a Hindi version, hindi.news24online.com, to cater to a wider audience. Expanding into the entertainment space, it launched e24bollywood.com, covering Bollywood news and updates. In the beginning, it relied on Google AdSense for ad revenue, but as it grew, content aggregators like Times Internet (TIL), Daily hunt and direct clients including government agencies helped it generate additional income and build its brand recognition over a period.
Over a few years, the company has constantly adapted to technological advancements to stay relevant in the competitive market and shifting user preferences. Initially, its websites were desktop-focused, but with the rise of smartphones and mobile internet, it shifted its focus to mobile users. Google’s move to mobile-first indexing made this shift even more important. It also developed mobile apps viz. News24, E24 to offer a more personalised experience to its readers. The transition from 2G to 5G has allowed it to create more mobile-friendly content and quickly connect with its audience.
The company specialises in digital content creation, producing text, audio, video, and infographics that are carefully crafted to meet the needs of its audience. Its focus is on delivering authentic, reliable content that resonates with its readers and viewers. It covers a wide range of categories to server that people are interested in, including Current Affairs (both in India and globally), Sports, Infotainment, Automobiles, Techno gadgets, Health and Spirituality. Its primary goal is to stay relevant and provide timely updates across these categories, ensuring that it always keep its audience informed and engaged.
Proceed is being used for:
- Expansion of existing business
- Acquisition/ production of content
- Brand building expenses
- General corporate purposes
Industry Overview
The Indian Media and Entertainment (M&E) sector has demonstrated a remarkable recovery and transformation in the wake of the COVID-19 pandemic. The industry's resurgence has been fueled by a combination of rapid digital growth, innovative advertising strategies, and consumer-driven content preferences. One of the most significant trends in the Indian M&E sector is the increasing dominance of digital media. The rapid proliferation of affordable smartphones, cheaper data plans, and improved internet connectivity have played a crucial role in the rise of digital media consumption. OTT platforms have significantly transformed the Indian M&E landscape, providing a diverse range of content that caters to audiences across different regions and demographic segments. The OTT market is estimated to experience double-digit growth in the coming years, with India positioned as one of the fastest-growing OTT markets globally. The growth of OTT platforms is further highlighted by India’s internet consumption patterns, with consumers increasingly shifting away from traditional TV viewing to embrace on-demand digital content. India’s burgeoning middle class, young population, and deepening internet penetration have all contributed to the expansion of OTT platforms. Moreover, the introduction of low-cost mobile data plans from telcos has accelerated the adoption of OTT services, making streaming content accessible to millions of users. Advertising remains one of the most critical drivers of growth in the Indian M&E industry.
In 2023, advertising accounted for approximately 55% of the total growth in the industry, with increased spending across digital platforms, including social media, OTT, and e-commerce channels. India’s diverse linguistic and cultural landscape has created a growing demand for regional and local content. With increasing internet penetration in Tier II and Tier III cities, Indian audiences are showing a strong preference for content in their native languages. As a result, regional content consumption in India has seen exponential growth in recent years, influencing the broader M&E sector. The demand for regional content is expected to continue growing, driven by the increasing availability of highspeed internet in rural and semi-urban areas. This trend underscores the importance of localising content, not only by language but also by cultural relevance, themes, and storytelling styles. The future of the Indian M&E sector lies in leveraging the synergy between creativity and technology. Continued investment in digital infrastructure will be crucial to support the increasing demand for high-quality digital content. Enhancing broadband connectivity, particularly in rural areas, will be a key factor in ensuring that digital media reaches a wider audience.
Pros and strengths
Leadership position: News24 and E24, both owned by BAG Films and Media, are prominent channels in their respective fields, with News24 delivering trusted news and E24 focusing on Bollywood and entertainment. News24 is known for its timely, reliable news coverage across both national and regional levels, with a strong presence in Hindi-speaking regions, while E24 keeps viewers entertained with the latest celebrity gossip, interviews, and film updates. Both channels have successfully expanded their reach beyond TV through BAG Convergence, building a solid digital presence on platforms like YouTube, Facebook, and Instagram. This blend of credible news, engaging entertainment, and robust digital growth makes News24 and E24 standout brands that connect with large, diverse audiences across India.
Experienced promoter and senior management team: The company has a qualified management team, with industry experience in the services it offers. Its strong Promoter background and an experienced senior management team have helped it to offer high standards of customer service and support to its end customers. Its stable, senior management team has helped it successfully implement its development and operating strategies and provide quality service to its customers over the years.
Business partnerships: Business partnerships are a great way for the company to expand its reach. It entered into an agreement in the past with Eterno Infotech (Dailyhunt), Times Internet (TIL), Taboola, Facebook, Google, Inshorts, Shareit for publicizing its contents. It has recently signed an NDA with Samsung for CTV and in talks with some big OTT players. These partners are in the field of content aggregation and monetisation. By teaming up with other businesses, it can distribute its content across various platforms, reaching new and diverse audiences. These collaborations enable it to share content in different formats, such as text, audio, and video, catering to various preferences.
Risks and concerns
Process of content development is expensive, time-consuming: The company’s content development entails a costly, intricate, and time-consuming process, necessitating a prolonged period for the realization of the investment made. For FY 2024-25, 2023-24 and FY 2022-23, the Programming & Content Expenses & Advertisement is Rs 981.21 lakh, Rs 755.84 lakh and Rs. 993.08 lakh respectively. The expenditure associated with these initiatives may negatively impact the company’s operating results if not balanced by corresponding and timely increases in revenue. The termination of a content development, in which it has invested significant resources, may negatively impact its prospects, and fail to yield any return on investment. Consequently, this could adversely affect its business, operating results, and financial condition.
Require to obtain copy rights license from authors/producers/image owners: The company’s business requires it to obtain copy rights license from the authors/producers/image owners etc. and the failure to obtain licenses or authorisation in a timely manner may lead to striking down of the content and litigation which may adversely affect its business operations. Further the ownership of various Works is sometimes difficult to determine and may be disputed. Plagiarism, copyright violations and piracy are major challenges in its business. In the June 2023, YouTube has done copyright strikes in the past on its news videos. This had impacted its business from YouTube channel and accordingly its FY 2024 revenue from YouTube channel came down by 9.70% as compared to FY 2023.
Business is working capital intensive: The company needs to continuously invest in people and infrastructure to grow its business. Its business requires significant amount of working capital and major portion of its working capital is utilized towards credit offered to its customers and Inventories of content it expects to utilise for longer period. Its, Trade Receivables for the financial year ended March 31, 2025 were Rs 1405.30 lakh and its Inventories during the same period were Rs 176.54 lakh. The company’s inability to maintain an optimal level of working capital required for its business may impact its operations adversely.
Outlook
B.A.G. Convergence is a dynamic force in the realm of Digital Convergence. It specialises in assisting broadcasters to seamlessly transition from traditional media platforms to the digital sphere, empowering them to thrive as digital publishers. The company is committed to empowering its clients with the tools, knowledge, and support they need to thrive in the digital age. Its mission is not just to facilitate a transition but to enable a transformation, helping broadcasters unlock new opportunities and reach audiences in ways never before possible. On the concern side, the company’s top ten customers contribute to a substantial portion of its revenues from operations. If there is a reduction in demand for its products or services from these major clients, it could have a negative impact on its business, financial performance, and overall financial health. The company’s B2B operations are subject to high volatility. Its inability to maintain an optimal level of working on the platforms of digital giants such as YouTube and Google and on the platforms created in-house may impact its operations adversely.
The issue has been offering 56,00,000 shares in a price band of Rs 82-87 per equity share. The aggregate size of the offer is around Rs 45.92 crore to Rs 48.72 crore based on lower and upper price band respectively. On performance front, the revenue from operations for the FY 2024 is Rs 2991.71 lakh as compared to Rs 3,563.35 lakh during the FY 2025 showing an increase of 19.11% during FY 2025. Profit after Tax (PAT) increased from Rs 805.23 lakh for the FY 2024 to Rs 940.66 lakh in FY 2025.
The company aims to expand by launching new digital channels, including custom Content Management System (CMS), websites, and mobile apps, which will significantly enhance the company's presence in the digital ecosystem. This CMS will be created and managed inhouse by the company itself. The company will focus is on creating a CMS tailored to editorial requirements and business needs of its clients. This includes integrating AI-driven features for generating Meta Titles, Meta Descriptions, and internal linking, along with ensuring SEO optimization for all articles. Additional enhancements and integrations will be implemented as per ongoing requirements of its clients.
