- Bid/Issue opens on : February 16, 2006
- Bid/Issue closes on : February 22, 2006
- Issue Price : Rs.64-70 per equity shares of Rs. 10 each
- Minimum application : 100 equity shares and in multiples of 100 equity shares thereafter.
- Maximum Retail Bid Amount :Rs. 100,000.
- Authorised Capital: 2,50,00,000 equity shares of Rs 10 each
2,50,00,000 preference shares of Rs 10 each - Issued Capital before the issue: 1,45,12,259 equity shares of Rs 10 each
38,40,524 preference shares of Rs 10 each - Issued Capital after the issue: 1,95,12,259 equity shares of Rs 10 each
38,40,524 preference shares of Rs 10 each - Promoters share pre-issue: 29.91%
- Promoters share post-issue: 22.25%
Background
K Sera Sera Productions Ltd (KSSPL) was incorporated as Garnet Paper Mills Ltd in 1996. The promoters of KSSPL purchased the company in 2002 and changed its name. The company is involved in film production, distribution and producing television content through its subsidiary, Twenty Twenty Television Company Ltd. The company has produced nine films.
Objectives of the Issue
KSSPL will use the issue proceeds for building infrastructure facilities for existing operations, fund distribution business, working capital for producing films and general corporate purposes.
Requirements of Funds
Acquisition of office premises........4.5 crore
Funding of distribution activities........3.00 crore
Funding film production.........25.00 crore
Points to consider
- Industry Growing at Robust Pace
- Strong pipeline of movies ahead
- Movie distribution and television content production to hurt bottomline
- Incomplete contract with Sahara India Mass Communication
- Financials
KSSPL posted a topline of Rs 37.51 crore for the FY05 compared to Rs 24.31 crore for FY04, while its bottomline decreased to Rs 2.25 crore from Rs 3.54 crore. In H1FY06, the company clocked an income of Rs 32.19 crore and posted a profit of Rs 5.24 crore due to success of movie Sarkar. It is making losses in the television venture and barely breaking even in the distribution business. - Valuations
The issue is being offered at a price band of Rs 64-70. The stock is valued at 23.79x-26x H1FY06 annualised earnings of Rs 2.68 on a post-issue dilution basis. The issue provides an arbitrage opportunity to investors as it is priced at a discount of 6.66% - 14.66% to the market price of Rs 75 per share. However, the company is moving to produce medium to high-budget films which is a high risk business where as it is still trying to establish a foothold in the film distribution and television arena. Investors may thus look at KSSPL for registering listing gains as integrated media players with similar valuations offer a better portfolio bet for the long-term.
