Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player


HT to offload 15% stake through IPO

HT to offload 15% stake through IPO

Author | exchange4media News Service | Thursday, Apr 28,2005 7:44 AM

HT to offload 15% stake through IPO

HT Media Ltd has filed a draft red herring prospectus with the Securities and Exchange Board of India (Sebi) for a 100 per cent book-built public issue of 46,40,000 equity shares (fresh issue) of Rs 10 each by HT Media Ltd and an offer for sale of 23,55,000 equity shares of Rs 10 each from HPC (Mauritius) Ltd.

The offer will also have a greenshoe option of 6,96,000 shares by the promoters, Hindustan Times Ltd. The IPO size (value) is still unclear.

The issue will constitute 15.08 per cent of the fully diluted post-issue capital of the company, assuming the greenshoe option is not exercised, and 16.33 per cent, assuming that it is exercised, according to the draft prospectus.

However, going by the proposed expenditure of the estimated amount raised via the fresh issue, it appears that the HT Media IPO is expecting to raise Rs 250-270 crore.

Of the money raised via the fresh issue, the company has earmarked Rs 76.40 crore for capital expenditure, Rs 76 crore for sales and marketing and Rs 10 crore for its radio services.

The company recently signed a memorandum of understanding with Virgin Radio (Asia) Ltd for its FM radio venture.

HT Media is a K K Birla group company. The promoters hold 77.11 per cent of the pre-issue equity share capital while Henderson has a 15.83 per cent stake and Citicorp holds 7.06 per cent of the pre-issue share capital.

The draft prospectus indicates that in October 2004, Citicorp had acquired a 8.27 per cent stake in the company for Rs 69 crore, giving it a pre-transaction value of Rs 765 crore, which indicates that the company's valuation has shot up by over Rs 700 crore in the last six months.

Going by the prospectus, the current valuation of HT Media Ltd could be as high as Rs 1,462 crore, market sources said.

Hindustan Times reported a net profit of Rs 15.71 crore for the first nine months ended December 2004 as against a loss of Rs 2.49 crore in the nine-month period ended in March 2004.

The company's total income stood at Rs 473.77 crore versus Rs 421.77 crore during the same period the previous year.

A rise in advertising revenue to Rs 368.82 crore from Rs 328.23 crore and subscription revenue to Rs 94.48 crore from Rs 83.67 crore resulted in the net profit climbing during the nine months ended December 2004. The company had Rs 307 crore in its share premium account (cash reserves) on December 31, 2004.

The launch of the Mumbai edition of "The Hindustan Times" is expected in mid-2005.

The draft says that "The Hindustan Times" is expected to invest Rs 50 crore in capital expenditure at the time of the launch of the Mumbai edition, of which Rs 12.60 crore had already been invested by March 31, 2005. The Mumbai operations are expected to incur losses in its early years of operation, the draft adds.

The draft says that "The Hindustan Times" during the period ended 31 December, 2004, derived about 79 per cent of its revenues from advertisements, of which the top 10 advertisers contributed about 8 per cent of the total revenue. About 20 per cent came from circulation revenue.

The sole book running lead manager to the issue is Kotak Mahindra Capital Company.

Tags: e4m

Write A Comment