MUMBAI: For the past couple of years, the stockmarkets have been going through rough weather dampening an entrepreneur's desire to raise funds through the initial public offering (IPO) route. With a new government in place, and optimism returning, the queue has once again started being formed outside the Securities Exchange Board of India (Sebi) of those going in for IPOs. Shemaroo Entertainment earlier this month approached the public and now it is the turn of the direct to home (DTH) service provider Videocon d2h which has finally made its filing with Sebi to raise Rs 700 crore.
This is the second time the firm has proposed to go public. It had previously filed documents in December 2012 and had received a go ahead from SEBI but did not go ahead with the public float.
Seven banks - including UBS, Axis Capital, ICICI Securities, SBI Capital Markets, Yes Bank, IDBI Capital will manage the share sale.
As per the statement issued by the company, “The price band and the minimum bid lot will be decided by our company in consultation with the joint global coordinators and book running lead managers.”
The company is also considering a preferential issue of up to 5,000,000 Equity Shares, aggregating up to Rs 50 crore with certain investors.
“Our Company will complete the issuance and allotment of Equity Shares pursuant to the Pre-IPO Placement, if any, prior to the filing of the Red Herring Prospectus with the RoC. If the Pre-IPO Placement is completed, the Issue size will be reduced to the extent of such Pre-IPO Placement, subject to the issue size constituting at least 10 per cent of the post-Issue paid-up Equity Share capital of our Company,” the notice also stated.
The company plans to spend a portion of the Net Proceeds of the issue towards acquisition of set-top boxes, outdoor units and accessories thereof from TEL, a Videocon Group entity.
“We propose to utilise Rs 350.83 crore of the Net Proceeds towards acquisition of set-top boxes and outdoor units from TEL,” the statement added.
The company is also looking to spend Rs 175 crore of the net proceeds to repay loans. “We may utilise a part of the Net Proceeds to repay/prepay certain term loan facilities availed from IDBI Bank Limited and ICICI Bank Limited, which are associates of the JGCBRLMs, IDBI Capital and I-Sec, respectively, and YES Bank, one of our JGCBRLMs.” The amount left will be used for other general corporate purposes.
The company commenced DTH operations in July 2009 and has grown its subscriber base from 0.44 million gross subscribers as of 31 March 2010, to 11.21 million gross subscribers, as of 30 June 2014, which represents approximately 16.2 per cent of the total DTH subscriber base in India.
For the first quarter of 2015 the company has approximately 27 per cent incremental market share of the DTH subscriber base in India.
The total income of the organisation for the three months ended 30 June 2014 was Rs 537.7 crore, during which time it generated net loss of Rs 78.15 crore. The firm has clocked a net loss of Rs 2,126 crore over the last five years.
