Subhkam Ventures-backed media and entertainment firm Midvalley Entertainment Ltd made a modest debut in the stock market, listing 4.2% higher than its issue price of Rs 70 and is trading at Rs 73.45 almost 5% above issue price. However, if it manages to hold on to the price, it would be considered a decent show given the negative sentiments in the market which typically affect all new listings.
The company, that raised Rs 60 crore in its fifth attempt to do so over the last decade, is largely into South Indian language film production, distribution and exhibition. It is promoted by Malaysian businessman K Ketheeswaran who along with firms associated to him acquired the company from original promoters Anuradha Chugh, Mala Chugh and Metro Film Pvt. Ltd in 2005-06.
The company also holds the music, video and television rights of movies, television serials for sales to TV channels and other emerging media sources. It also intends to emerge as one of the leading theater chains in Southern India and has currently entered into screening agreements with 46 theaters in distribution territories of Hyderabad and Tamil Nadu.
Midvalley plans to use the issue proceeds to enter into screening agreements with 300 cinema theatres as also for renovation and up-gradation of cinema infrastructure with digital equipment and other related assets for a select 100 screens. It also intends to use part of the money to acquire screening rights of company having similar line, range and objects of business.
It is not clear when and at what price Subhkam Ventures acquired the 2.11% stake that it owned pre IPO. It has been holding on to this stake for at least two years.
For the 10 months ended February’10, the firm had total income of Rs 8.4 crore that came largely from theater collections and distribution of films. It had total income of Rs 21.16 crore for the 12 months ended April’09. The firm had net profit of Rs 30.7 lakh for May’09-Feb’10 period compared to net loss of Rs 47 lakh in the year ended April’09.
Midvalley had originally approached Sebi over ten years ago under the previous management and received the market regulator’s observation in June 2000. It again filed with Sebi and received its observation in 2002. It had disclosed that the company, under the previous management had decided not to proceed with the public issue on the above two occasions in view of the then prevailing market sentiments.
Under the new management it again filed its DRHP in July 2007 but the merchant banker withdrew the offer due to inconsistency in the financial information, and eligibility criteria. Thereafter it filed DRHP again in October 2008. It received Sebi’s observation in May 2009 but the firm in view of the then prevailing market sentiments decided not to proceed with the public issue.
The promoter group that owned 49.46% stake pre issue hold 37.41% in the company as of January 21.