Info-tech

Brightcom group goes for organisational restructuring to help streamline fund flows

KV Kurmanath Hyderabad | Updated on February 10, 2020 Published on February 10, 2020

Twelve subsidiaries of the digital media and marketing group will be brought under one US entity

Brightcom, formerly known as Ybrant Digital, has decided to restructure by pooling almost all of its foreign subsidiaries and bringing them under one firm.

Of the 16 subsidies it has in the group, 12 will be brought under a newly-formed US entity. The board of directors will consider a proposal to appoint an auditor to advise on the restructring. The new foreign entity will be wholly owned by the Indian listed company.

Brightcom, which deals with solutions for digital media, digital marketing, artificial intelligence and machine learning, hopes that the new structure would help improve streamlining of fund flows.

The firm says funds to the tune of Rs 700 crore are struck in receivables.

Fund flow issues

“In most cases, the receivables take 90-120 days to fructify. But the firm is under obligation to pay the publishers in under 30 days. This creating a lot of problems,” Suresh Reddy, Chairman and Managing Director, Brightcom Group, told BusinessLine.

The restructuring, he argued, would open up opportunities to tap a line of credit, easing the issue of payouts.

“We are struck with the issue (fund flows) for over seven years and it has become a big pain. We have decided to find a solution. We thought the regrouping the foreign subsidiaries under a US entity is the best way out,” said Reddy.

Expansion opportunities

The group, which registered a topline of about Rs 2,500 crore in 2018-19 and a net profit of Rs 400 crore, is looking at similar turnover numbers this fiscal as well.

The firm has about 350 employees, including 150 in India.

Reddy also said the firm will explore opportunities in audio and video advertisement solutions, as mobile bandwidth penetrates further deep and consumption of digital content increases.

Ybrant Digital, founded in 2000, bought a number of companies, including LGS Global, and became a listed company through this acquisition.

Published on February 10, 2020
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