Shringar Cinemas, a movie exhibition company, floated by the Shroff family is entering the capital market with a public issue of 81,50,000 equity shares of a face value of Rs 10 each, which will constitute around 25.82 per cent of the new equity of Shringar Cinemas.
The public issue would be launched through a 100 per cent book building route to raise funds for expansion of the company’s network of movie theatres and multiplexes. Shringar expects to mop up around Rs 50 crore from the public offer. In the current shareholding pattern, the Shroff family holds around 65 per cent in Shringar Films through its investment company South Yarra Holdings.
The remaining 35 per cent is with GW Capital. Following the public issue, the Shroff holding will fall to around 48 per cent, while GW Capital’s control will shrink to 26 per cent.
As Shravan Shroff, Promoter, Shringar, explains, 2,50,000 equity shares are reserved for the allotment to employees of the company and 50 per cent of the remaining i.e. 39,50,000 shares are reserved for allocation to qualified institutional buyers (QIB) on discretionary basis, 25 per cent i.e. 19,75,000 shares are reserved for allocation to non-institutional bidders and the rest is reserved for retail individual bidders – both on proportionate basis.
“A switch was made with Shringar Cinemas serving as the holding company. After the switch, the distribution arm Shringar Films is now a 100 per cent subsidiary of Shringar Cinemas. Around Rs 5 to 10 crore of the IPO funds will be invested in developing the distribution company,” Shroff says.
Lead merchant bankers for the issue are JM Morgan Stanley and Enam Financial Consultants and legal consultant is Amarchand Mangaldas. The valuation of the different Shringar businesses is estimated to be between Rs 200-250 crore.
The expansion plan for the exhibition company this year includes the opening of two four-screen multiplexes in Mumbai suburb of Kandivili in the Raghu Lila and Vijay Wadhwa malls as well as two three-screen multiplexes, one each at Pimpri, near Pune, and Himmayat Nagar, Hyderabad.
Over the last five-seven years, factors such as strong economic growth, falling interest rates, increased interest in real estate development, increased consumption levels, etc. have resulted in a large boom in the organised retail sector in India. A number of large organised retail outlets have been trying to attract large footfalls by building in attractive properties such as branded food and apparel outlets as well as theater chains.