SEBI clears theme park operator Adlabs Imagica IPO

Market regulator SEBI has given the green signal to Manmohan Shetty-promoted Adlabs Entertainment Ltd's proposed IPO. The approval for the public float came last week.

This makes it the sixth firm in the queue with SEBI clearance for an IPO along with Monte Carlo Fashions, Inox Wind, NCML Industries, GESCO and Jyoti CNC Automation.

Adlabs Entertainment Ltd, the firm behind theme park Adlabs Imagica, had filed the draft red herring prospectus with SEBI to raise over Rs 400 crore ($68 million) via IPO in May this year.

The firm is looking to issue 23 million shares including 2 million shares offered for sale by the promoters.

Given that SEBI norms mandate that a company cannot allocate more than 25 per cent of the issue proceeds under ‘general corporate purposes’, Adlabs Entertainment could be looking to raise anywhere between Rs 400 crore and Rs 533 crore. This would mean price per share in the range of Rs 190-254 a unit.

The firm had previously raised funding from ICICI Venture at Rs 220 a share. ICICI Venture would be sitting on up to 15 per cent upside in the proposed issue, as per back-of-the-envelope calculations.

In a deal struck last August ICICI Venture through its India Advantage Fund agreed to invest around Rs 144 crore through a mix of shares and compulsorily convertible debentures (CCDs). The proceeds of this investment were proposed to be used for capital expenditure for setting up of the theme park, water park, hotel, retail, dining and entertainment. The CCDs are not yet converted into shares.

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

(Edited by Joby Puthuparampil Johnson)

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