NEW DELHI: Star Group has received FIPB (foreign investment promotion board) approval for investing Rs 72.02 million to pick up a 20 per cent stake in Music Broadcast Pvt. Ltd. (MBPL), the company that operates FM radio business under the Radio City brand.

The acquisition is being made through Mauritius-based Acetic Investments. Star had earlier exited from Radio City, having sold its stake for Rs 300 million. India Value Fund had acquired a controlling stake in MBPL.
Indiantelevision.com was the first to report that Star was making a re-entry into the FM radio business by buying 20 per cent equity from India Value Fund (earlier GW Capital). With this, India Value Fund's holding would drop from 75 per cent to 55 per cent.

"It may be a buy back arrangement Star had with India Value Fund. Being the second largest player, the valuation of Radio City will be pretty high," says a source who is tracking the industry.

The government regulations permit only 20 per cent foreign direct investment (FDI) in the FM radio business.