Expecting the party to last, a barrage of media companies had hit Dalal Street last year. But the sluggishness in the sector seems to have forced these companies to go slow on utilising these funds.
Companies such as Mukta Arts which raised Rs 100 crore through its initial public offering (IPO) has managed to utilise about Rs 52.18 crore by June 30, 2002, while television software companies such as Creative Eye which raised about Rs 25.22 crore have also utilised below 50 per cent of the proceeds. Others like Mid-Day Multimedia and Cinevistas have also been slow in capital utilisation till the end of the first quarter of 2002-03.
These companies have, in fact, parked the capital in fixed deposits of nationalised banks or in various debt funds. However the recent recession and change in business plans had made them go slow.
Creative Eye plans to utilise their funds as and when there is a good business opportunity. They are looking at more serials and also a Hindi feature film. The company also has changed its business plan and is working with more satellite channels. Earlier, it produced more serials for Doordarshan, its mainstay.
Mid-day Multimedia has, in fact, decided to exit from certain businesses. It has decided to wind up the advertising tabloid, The Brief and get out of the FM radio business in Delhi and Chennai.
According to Media analysts Mukta Arts had gone slow in its plans of setting up an integrated studio, research centre and training institute. Mukta Arts also seems to be going slow on acquisition of film and music rights.
However, among the companies that raised money through the capital markets, only two companies - Adlabs Ltd and Balaji Telefilms, have utilised considerable portion of the proceeds.