Sun TV's prospects are not looking sunny. Know why

Shares of Sun TV Network, the largest media organization in South India, fell 2.5 percent after The Economic Times reported an inter-ministerial panel had rejected the group's plea to participate in the next round of auctions for FM radio waves. It indicated that the group's application to request renewal of license for its 33 TV channels could also meet the same fate, the paper said.

The Home Ministry had earlier denied the Sun Group security clearance, the report added. The group, headed by a politically powerful family, is likely to move court against the government's decision, the paper said.

Shares of Sun TV fell 7.10 rupees to 271.95 on the National Stock Exchange, where 7.8 lakh shares were traded in the first hour of trade compared with the 5-day average of 16.4 lakh shares. Futures of Sun TV were the top losers in the derivatives segment, showing a build up of short positions on the counter.

Sun TV has seen its market capitalisation erode 37 percent in the past one year to 10,700 crore rupees.

(Image credit: Indiatimes)