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Thursday, February 08, 2007

Raj TV fixes IPO price band at Rs 221-257; opens on Feb 14

Raj Television Network, a regional broadcaster and media company, is entering the capital markets with an initial public offering, IPO of 35,68,250 equity shares of face value of Rs 10 each, for cash, at a premium to be decided through a 100% book-building process.

The price band for the issue has been fixed between Rs 221 and Rs 257 per equity share. The issue opens on February 14, 2007, and closes for subscription on February 23, 2007. The equity shares of the company are proposed to be listed on the Bombay Stock Exchange and the National Stock Exchange.

Of the total 35, 68,250 equity shares, the employee reservation portion is 3, 24,384 equity shares, the net offer to the public is 32,43,866 equity shares. The issue is being made through a 100% book building process wherein not more than 50% of the net offer to the public shall be allocated on proportionate basis to qualified institutional buyers (including 5% for mutual funds).

Further, not less than 15% of the net offer to the public shall be available for allocation on a proportionate basis to non institutional bidders and not less than 35% of the net offer to the public shall be available for allocation on a proportionate basis to retail bidders, subject to valid bids being received at or above the issue price. Upon completion of the issue, the promoter / promoter group will own 72.50% of the post-issue equity share capital.

The objects of the public issue are to: strengthen production facilities; enhance content and content acquisition; launch a new youth-centric television channel; broadcast existing channels in the international market; produce short-films/ telefilms; acquire and export films in the international market; and, construct new studio premises.

The company posted a total income of Rs 3,195.98 lakh as of the financial year ended March 31, 2006, as compared to Rs 2,964.42 lakh for the financial year ended March 31, 2005. The total income was Rs 2,950.18 lakh for the period ended December 31, 2006. The net profit (restated) for fiscal 2006 was Rs 381.56 lakh (restated) as compared to Rs 297.75 lakh for fiscal 2005. The net profit (restated) for the period ended December 31, 2006, was Rs 986.74 lakh.

Raj TV was one of the first broadcasters to convert analog transmission into digital. The network’s strength has been its large content base addressing every member of the family thereby making it a true “People’s Channel”. It currently operates two channels — Raj TV and Raj Digital plus, which are 24-hour Tamil channels. The Company’s strategic advantage includes its wide viewership, multi-content programming, business model, regional prominence, cultural programming and experienced management team.

The book running lead managers to the issue are Vivro Financial Services while the co-manager is Canara Bank, as per press release.

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