The Hindu Business Line : Real estate project propels Media Video

Media Video today shot up smartly on the BSE following an official announcement regarding one of its real estate projects. Incidentally, Business Line on January 23 had first reported the news regarding the country's top DVD manufacturer's new venture.

The stock logged a traded quantity of 2.71 lakh shares (15-day average is 52,058 shares) on the BSE and closed with a gain of 6.41 per cent at Rs 37.35.

According to market sources, the company is in the process of beginning its first real estate project shortly.

Today's announcement was related to a township project in Haryana; the company has also finalised another project for a residential complex in Rajasthan.

Market analysts said that re-rating of the stock seems to have begun as investors are gradually getting an idea of the new business division's activity and revenue stream.

Currently, the company has taken up two real estate projects. According to industry sources, the company has acquired around 8.6 lakh sq ft at a Rajasthan industrial belt 50 km off the National Capital Region for a residential complex at an estimated cost of around Rs 120 crore. Construction work is scheduled to start in March.

The real estate projects would be funded by the proceeds of preferential share warrants of Rs 81 crore, term loans, advances from property buyers, and internal resources. An allotment of 2.7 crore warrants had been made in February, market sources said.

For the Rajasthan project, the company has obtained a term loan of Rs 45 crore from a nationalised bank. A Rs 350-crore loan has been planned for the Haryana project, banking sources said.

During the quarter ended September 2005, Media Video had allotted 26,80,538 equity shares of Rs 10 each to Bennett, Coleman & Co Ltd for cash at a premium of Rs 16 a share adding up to 14.93 per cent of paid-up capital.

After warrant conversion, however, Bennett, Coleman & Co's holding would come down to around nine per cent, market sources said.

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