Adlabs Entertainment to open IPO on March 10; cuts issue size after pre-IPO placement

Manmohan Shetty-promoted Adlabs Entertainment Ltd, the firm behind theme park Adlabs Imagica, is opening its initial public offer (IPO) on March 10 and would close it on March 12, making it the second public float in the new year.

Next week Ortel Communications is scheduled to float its public issue.

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 the pre-IPO placement in October was made at Rs 230 a share, the more recent securities conversion were done at Rs 138-187 a share.

The firm is now issuing total of 20.03 million shares, including offer for sale of 2 million shares by the promoters, which could scoop around Rs 400-500 crore. The price band of the issue has not been frozen yet.

The firm has said it may issue up to 9.14 million shares to anchor investors, which would be culled out from the QIB portion of the public issue.

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 Entertainment is looking to raise the money to part repay its outstanding debt. The firm had availed of 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 & 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.

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