Adlabs Entertainment fixes IPO price band; ICICI Venture sitting on 66% upside

Manmohan Shetty-promoted Adlabs Entertainment Ltd, the firm behind theme park Adlabs Imagica, has fixed the price band for its initial public offer (IPO) at Rs 221-230 a share. The issue, which opens on March 10 and close on March 12, would be the second public float in the new year.

Ortel Communications has just floated its public issue.

Adlabs had earlier snipped the proposed size of the public issue. When it had filed its draft red herring prospectus last year it had said it plans to issue 23 million shares, including 2 million shares offered for sale by the promoters.

Adlabs had also said that it is considering a pre-IPO placement of up to 3 million shares for up to Rs 80 crore.

The firm did go ahead with such a placement where it sold a small stake to NYLIM Jacob Ballas India Holdings IV (NYLIM-JB) and Jacob Ballas Capital India Private Ltd (JBC), raising Rs 50 crore in the process.

This brought the second PE investor into its fold as the firm had earlier raised money from ICICI Venture in 2013.

Post conversion of convertible securities into shares, ICICI Venture now holds 16.95 per cent stake while NYLIM-JB owns 4.13 per cent and Jacob Ballas separately owns 0.22 per cent.

While ICICI Venture is sitting on unrealised gains of around 66 per cent on its investment, Jacob Ballas is potentially sitting on 23 per cent upside at the upper end of the price band.

The firm is now issuing 20.03 million shares, including offer for sale of 2 million shares by the promoters, which could scoop up around Rs 460 crore.

Adlabs was the first large company to file for a public float after the general elections last year, whose result is seen as positive for the primary market. Early last year another theme park and resorts operator Wonderla Holidays successfully completed its IPO and listed with gains on the bourses.

Adlabs is looking to raise the money to part repay its outstanding debt. The firm had availed of a consortium loan through the common loan agreement for capex towards the development of Adlabs Mumbai, which includes the theme park, the water park, the hotel and retail, dining and entertainment facilities besides repayment of short term loan from Syndicate Bank for the development of the same project.

Its flagship property Adlabs Imagica is a theme park located in Khopoli in the Mumbai-Pune expressway and was opened in April last year. Spread over 300 acres, the theme park has around 21 rides at present and the firm is expanding the project.

It will also include a water park and a three-star/family hotel which will be operational in early 2015. The park can accommodate about 20,000 visitors daily and aims to host over 3 million visitors in the first year of operations.

Its promoter Manmohan Shetty is better known as the founder of Adlabs Films Ltd, which was acquired by Reliance Group (earlier Reliance ADAG) and is now renamed as Reliance Mediaworks Ltd. He ventured into the theme park business after selling the previous firm.

His group includes Walkwater Media Ltd (WML) which is engaged in the business of film and television content production as well as seeding promising ventures within the media and entertainment space. It has produced/co-produced movies like Tere Bin Laden and Rajneeti. Other ventures seeded by the group include Scrabble Entertainment, which was later acquired by UFO Moviez.

Adlabs Entertainment’s proposed issue is being managed by Deutsche Equities, Centrum Capital and Kotak Mahindra Capital.

(Edited by Joby Puthuparampil Johnson)

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