Shares of print media companies such as HT Media, DB Corp and Jagran Prakashan surge up to 15% in the early morning trade on Wednesday after the Narendra Modi-led government made an announcement to raise advertisement rates in print media by 25%. The new rates will be effective from Tuesday and valid for a period of 3 years.
While shares of Jagran Prakashan rose about 8.8% to Rs 125.5; DB Corp share price went up by 7.2% to Rs 183.00 and HT Media shares surged as much as 15% to Rs 46.00 per share, its biggest daily pct gain since October 10, on the BSE from the previous close.
In a statement late evening on Tuesday, the Ministry of Information and Broadcasting said that it has decided to revise the advertisement rates with the hike of 25% over and above the existing rate structure for advertisement in print media by the Bureau of Outreach and Communication. The last revision was in 2013 when the government had raised ad rates by 19% over and over the rates of 2010.
“This decision has been taken based on the recommendations of the 8th Rate Structure Committee constituted by I&B Ministry which took into account several factors, including the increase in the price of newsprint, processing charges and other factors which go into the computation of advertisement rates,” the official statement said.
Interestingly, the development comes just a few months ahead of the general elections when most of the contesting political parties use print advertisement to reach masses. In the statement, the government said that the move will be of great benefit, particularly to the medium and small newspapers, most of which are in regional and vernacular languages.