Saregama India acquires 51% stake in Pocket Aces for ₹174 cr; stock rises 4%

In a bid to expand its digital footprint, Saregama India, a wholly-owned subsidiary of RP-Sanjiv Goenka (RPSG) Group, acquired a 51% stake in Pocket Aces Private Limited for ₹174 crore, according to the regulatory filing of the company. The company expects to further acquire another 41% stake in Pocket Aces in the next 15 months at pre-agreed multiples. The transaction is an all-cash deal. Pocket Aces is the parent company of digital content channels such as FilterCopy, Nutshell, Gobble and Dice Media, amongst others.

"This acquisition will further strengthen Saregama's strategic ambition to take a leadership position in New Music across all Indian languages," says the company.

Pocket Aces is a youth-focussed digital content creator and publisher that boasts of an IP (intellectual property) catalogue of over 3000 content pieces ranging across web series, sketches, music videos and reels on its channels FilterCopy, Nutshell and Gobble and releases over 30 new pieces of content every day. The company’s talent management arm, Clout, manages more than 100 digital influencers, and its long-form studio, Dice Media, has created relatable youth-centric web series across OTT platforms such as Netflix, Hotstar, and Amazon, says the company.  

In FY23, the revenue from operations of Pocket Aces Private Limited stood at ₹104 crore. Revenue has grown by 34% CAGR (compound annual growth rate) over the last 4 years and is expected to grow even faster in future.

According to the company, acquiring Pocket Aces will add a whole new dimension of IP and a distribution network of over 95 million followers, which Saregama, formerly known as The Gramophone Company of India Ltd, will leverage to further popularise its music library among the 18-35 audience segment. It will also create synergies across the artiste & influencer management and long-format video creation businesses of the two companies, says the company.

"This acquisition signifies the confluence of tradition and innovation. While we have always been leaders in the realm of music and media, this partnership with Pocket Aces will add new dimensions to our business as we tap into the burgeoning young digital audiences," says Avarna Jain, vice chairperson, Saregama.

Saregama India owns the largest music archives in India. The company has ownership of nearly 50% of all the music ever recorded in the country. The company has also expanded into other branches of entertainment such as publishing, film production and digital content.

Following the development, shares of Saregama India, on Friday opened higher at ₹384.50, up 4.17%, as against the closing price of the previous session at ₹369.10. The share price of the company surged as much as 6.5% to hit an intraday high of ₹393.35. However, after the initial surge, the surge price plunged by 1.3% to hit an intraday low of ₹364.30. At 11:11 am, shares of Saregama India were trading 0.31% lower at ₹367.95. During the session in early trade, the company’s market capitalisation stood at ₹7,093.46 crore, with 93,694 shares exchanging hands as against the two-week average of 0.41 lakh shares.