Entertainment Network (India) Ltd, which operates its FM radio broadcast business under the Radio Mirchi brand, is entering the capital market with its initial public offering of 12 million shares priced at Rs 144 to Rs 162 per share. With this ENIL plans to raise Rs 194 crore at the upper end of the price band.
ENIL has also earmarked 1.2 million shares to be issued as a green shoe option. The issue opens for subscription on January 23, 2006 and closes on January 27, 2006.
Speaking at a press conference on January 17, 2006 to announce the IPO, Vineet Jain, Managing Director, Bennett, Coleman & Company Ltd (BCCL), said, “It is an important milestone for us. This is the first time that we are taking any of our companies public.” He added that increasing consumerism, urbanisation and government initiative would combine to drive growth in this space.
ENIL plans to utilise Rs 1.45 billion from the IPO proceeds as one time entry fee (OTEF) and migration fee payments under the Phase II policy. An additional Rs 100 million has been earmarked for the company’s event management and OOH business.
“The Times Group’s commitment to the radio space started way back in 1995, when we launched Times FM. As a strategy, the group wanted to straddle the media and entertainment space. Today, that vision of ours has been realised. With the recent wins of frequencies in seven more key markets (like Bangalore and Hyderabad), I believe Radio Mirchi will continue to occupy its leadership position,” Jain added.
A P Parigi, MD and CEO, ENIL, said that independent estimates had put the growth rate in radio industry revenues in 2006 at 14.3 per cent, from Rs 322 crore in 2005. The FM space had big potential since it was still under-penetrated, Parigi said, adding that following the Phase II of bidding, Radio Mirchi would now be present in each of the 13 cities with a population of over two million, making it an extremely attractive proposition for advertisers.
Parigi further said that ENIL had its sights set on overseas markets as well. “We have an overall plan for international expansion. The proceeds of the IPO would, however, be used for domestic expansion, largely to pay the one-time entry fees for Phase II.”
The issue will constitute 25.9 per cent of the post-issue paid-up capital of the company assuming the green shoe option is not exercised, and 27.8 per cent, if it is. Other than Radio Mirchi, ENIL is also present in the event management and outdoor media spaces through brands like 360 Degrees and Times Out-Of Home Media (Times OOH), respectively.
For the six months ended September 2005, ENIL earned a net profit of Rs 11.05 crore on a total income of Rs 49.5 crore, which was about 56 per cent higher than the corresponding period of 2004. JM Morgan Stanley and Enam Financial Consultants are the book-running lead managers to the issue.