Sun TV Shares Crash Over 25% to 52-Week Low

Sharemasterindia.com: Shares in Sun TV, promoted by billionaire Kalanithi Maran, crashed 28 per cent on Monday amid reports that the broadcast major may have to take off its 33 channels off air in the absence of security clearance by the Ministry of Home Affairs.

According to Press Trust of India, the home ministry struck down a proposal by the information and broadcasting ministry for giving security clearance to 33 television channels of Sun TV Network. The decision was taken because of pending criminal cases against Mr Maran and his brother and former Union Minister Dayanidhi Maran, PTI said citing sources in the ministry.


"The company could have earned huge revenue and profit from digitization process, so this news is a big setback for them," said Ashwin Patil of LKP Securities.

Broadcasters such as Sun TV need a security clearance every 10 years in order to continue their operations, analysts said. Sun TV is the number one channel in the four south Indian states of Andhra Pradesh, Kerala, Tamil Nadu and Karnataka, according to media reports.

Mr Patil said Sun TV will definitely appeal against the decision in the court and get some solution. "It's a temporary issue, we cannot quantify the impact of such an issue," he added.

Sun TV shares traded 26 per cent lower at Rs 265.45 as of 09.30 a.m. as against a 0.4 per cent drop in the broader markets. The stock had fallen to a day low of Rs 258, also its 52-week low.