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UTV plans Rs 100 crore IPO

27-February-2004
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UTV plans Rs 100 crore IPO

Media entertainment company UTV Software Communications is considering an initial public offering (IPO) of about Rs 100 crore in the last quarter of 2004. Part of the proceeds will be utilised for the proposed kid’s channel. UTV founder-promoter Ronnie Screwvala has already announced that he would be launching a Hindi kid’s channel in the period between July and September this year.

The initial public offering funds will also be used for working capital requirements and investment into infrastructure, said UTV director of operations and finance Ronald D’Mello. Theinitial public offering will be a combination of fresh issue and offer for sale by one of the investors. Canada-based private equity fund CDPQ holds 30 per cent stake in UTV. Rupert Murdoch-promoted News Corp holds 17 per cent stake while 5 per cent is held by several individual investors. Mr Screwvala has 24 per cent. The balance is held by financial institutional investors, said Mr D’Mello.

When asked about the initial public offering, Mr D’Mello said that the company is looking at a public issue in the last quarter of the year.

“We are keeping ourselves ready and prepared for the IPO, given the good market situation. The initial public offering would include a primary issue and an offer for sale. We are looking at an IPO of around Rs 100 crore, he added.

The company is in talks to appoint Enam Financial Consultants to evaluate the conditions and present to the board. UTV expects to reach a turnover of around Rs 120 crore this year. Television content accounts for 30 per cent of the company’s total business while airtime sales and movies comprise 25 per cent each. The balance is made from post-production, animation and other peripheral activities.

“Our revenues last year was Rs 100 crore. We will see an increase to Rs 120 crore this year. We will have 15 per cent increase over last year from our television content business,” said Mr D’Mello.

UTV’s movie business is de-risked for the next two years, said Mr D’Mello, primarily because of the contract with STAR for co-producing 3-4 movies on a corpus of around Rs 50 crore.

The company is also co-producing two mega movies, Swadesh and Lakshya, the revenues of which will flow in the next financial year.

UTV is producing a new programme for STAR Plus which is expected to air in the middle of April.

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