MUMBAI: The Telugu television market is poised to become the new hot spot with superstars Nagarjuna and Chiranjeevi acquiring stake in Maa TV Network Ltd, the company which owns and operates a Telugu general entertainment channel.

Along with Matrix Laboratories Ltd (a listed company), promoter N Prasad, Nagarjuna and Chiranjeevi will hold 60 per cent of Maa TV in a purchase deal worth Rs 400 million, a source close to the deal tells Indiantelevision.com. A formal announcement will be made soon.

"In the revised capital structure of Maa TV, the three of them will have equal stake. The company will have a fresh infusion of Rs 500 million with the original promoter putting in Rs 100 million," the source says.

Maa TV founder-promoter Murali Krishna Raju's holding will come down to 20 per cent after the restructuring. Raju, along with his associates, held around 80 per cent stake in the company. His individual holding was 50 per cent, the source adds.

The fresh capital will be used to revamp the channel and fund other expansion programmes. "The whole business plan is being reworked. The company is finalising its strategies," the source says.

The restructuring will involve hiring of professionals including a chief executive. While Nagajuna and Chiranjeevi will also provide their creative inputs, Prasad has come in as a financial investor. "This will mark Prasad's first investment into media," the source says.

Maa TV has been in search of funds for a long time and was earlier in talks with Star India and Sun TV. The entertainment channel was banking on movies, events and interactive mobile-based shows to drive in numbers but late last year introduced soaps in its programming lineup.

Star India is planning to launch a Telugu channel in January, a market which is dominated by Sun Group's Gemini TV and ETV Telugu. Zee made its entry in the South market with its Telugu entertainment channel in May 2005.