Financial Daily from THE HINDU group of publications
Friday, Mar 25, 2005
Financial Daily from THE HINDU group of publications Friday, Mar 25, 2005 |
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Corporate
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IPOs Shringar Cinemas may end fiscal in red Our Bureau
Mr Shyam Shroff, Chairman, Shringar Cinemas Ltd (left), with Mr Shravan Shroff, MD, at a press conference in Mumbai on Thursday. — Paul Noronha
Mumbai , March 24 SHRINGAR Cinemas Ltd, which is entering the capital market to raise funds, is expected to end the current fiscal negatively on the bottomline. But a return to profits is possible in the next fiscal as its investments in the area of exhibition will begin to play out. The company is expanding from 14 screens to 42 screens by the end of 2005-06. It is also in the process of lowering its exposure to distribution from 50 per cent to 25 per cent and increase revenue contribution from exhibition up to 75 per cent. In order to mitigate the risk in distribution, Shringar Cinemas has opted for the commission model. The company has also tied up with United International Pictures (UIP) to distribute foreign films from May 2005 also on a commission basis. In the exhibition business, the company has chosen to lease properties instead of locking money is buying property. ``We go for 10 year and more contracts,'' Mr Shravan Shroff, Managing Director, Shringar Cinemas Ltd, said. The company plans to raise Rs 38-43 crore from the equity market through an initial public offering of 81,50,000 equity shares of Rs 10 each. The price band has been set at Rs 47-53 per share. The proceeds of the IPO will be used for funding exhibition growth and opening up multiplexes in Thane, Hyderabad, Aurangabad and Kolkata. The book running lead managers to the issue are Enam Financial Consultants Pvt Ltd and JM Morgan Stanley Pvt Ltd.
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