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Hindustan Times IPO opens on August 4 with green shoe option

27-July-2005
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Hindustan Times IPO opens on August 4 with green shoe option

In less than a fortnight of the launch of its Mumbai edition, HT Media Ltd, India's second largest print media company in terms of circulation of daily newspapers, has announced that it is entering the capital market with an initial public offer comprising a fresh issue of 4,640,000 equity shares and an offer for sale by HPC (Mauritius) Ltd of 2,355,000 equity shares of Rs10 each for cash at a premium to be decided through the book-building process. The price band for the offer is Rs 445-530. The issue opens on August 4, 2005 and closes on August 10.

The funds generated through the offering would be utilised primarily to meet the company's capital expenditure plans and brand building initiatives as well as obtain the benefits of listing.

The IPO has a green shoe option of up to 696,000 equity shares to be offered by Hindustan Times Ltd. If exercised in full, the aggregate offer would go up to 7,691,000 equity shares. The issue, without the green shoe option, would constitute 15.08 per cent of the fully diluted post-issue capital, and with the green shoe option, it would be 16.33 per cent.

At least 60 per cent of the issue will be allocated on a discretionary basis to qualified institutional buyers. Besides, not more than 10 per cent of the issue to the public will be available for allocation on a proportionate basis to non-institutional bidders, and not more than 30 per cent of the issue to the public will be available for allocation on a proportionate basis to retail individual bidders.

Addressing the media on Tuesday, Shobhana Bhartia, Vice-Chairperson, HT Media, said, “Over the years Hindustan Times has established itself as one of the strongest brands in the print media sector. The company has witnessed constant improvements in terms of readership, circulation and financial performance. With our geographic expansion plans, including our recent successful launch in Mumbai, we believe we are well poised for exponential growth. Our vision is to build HT Media into the leading media company in terms of quality and size.”

According to Rajiv Verma, CEO, the ad spend in India as a percentage of GDP was still very low and thus, there was high growth potential in the market. “Market share of ad spend in India is 46 per cent in print and 41 per cent in television and we hope this trend continues paving the way for increased investments,” he said.

With the liberalisation of FDI policy for print media, Citicorp has taken an equity stake of 7.06 per cent in HT Media, while HPC (Mauritius) has taken a stake of 15.83 per cent of the pre-issue capital. Hindustan Times, the promoter, holds 77.11 per cent of the company’s pre-issue capital.

Net paid sales of the two newspapers, Hindustan Times and Hindustan in Hindi, were approximately 2.17 million copies per day (ABC July-December 2004) with a total daily readership of approximately 14.5 million (NRS 2005). Hindustan Times is the second largest English daily in the country while Hindustan is the third largest Hindi daily.

The company during the year ending March 31, 2005 reported a total revenue of Rs 634.20 crore and net profit of Rs 27.52 crore. For the quarter ended June 30, 2005, the revenue was Rs 184.75 crore with a net profit of Rs 9.8 crore.

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