The company intends to raise Rs 400 crore and pay off an immediate debt of Rs 150 crore to its parent company, Jagran Prakashan Limited. It plans to use the remaining part to strengthen its capital structure
BestMediaInfo Bureau |Mumbai | February 28, 2017
Music Broadcast Limited, which operates radio stations under the brand ‘Radio City’, announced an initial public offer (IPO) on February 27. With the IPO, the company intends to raise Rs 400 crore and pay off an immediate debt of Rs 150 crore to its parent company, Jagran Prakashan Limited. It intends to use the remaining amount to strengthen its capital structure.
The organisation will offer equity shares of face value of Rs 10 each for cash at a premium of a fresh issue of up to Rs 400 crore and an offer for sale up to 2,658,518 equity shares. The company will open the IPO on March 6, 2017 and close the offer on March 8, 2017. The price band for the offer is fixed from Rs 324 to Rs 333 per equity share.
Apurva Purohit, Director, Jagran Prakashan, said the IPO will help the radio player grow, both financially and otherwise. The player’s debt has been of concern and is now immediately due to its parent company, hence the need for an IPO.
Purohit reasons that Radio City has been doing well for a long time. The government sector, real estate players and e-commerce players have been the key advertisers and drivers for growth for the company. Purohit claims that the network covers about 62 per cent of the population with its 37 stations and has over four crore listeners.
With the entry of streaming apps (audio or video), why will one consume radio? Purohit believes that with the increasing penetration of smart phones, localised content by radio jockeys and the curated music, people will continue to listen to radio. Streaming apps may have playlists which the consumer himself makes, but in radio there is spontaneity and that’s what distinguishes it.
The company, in consultation with the Book Running Lead Manager (BRLM), may consider participation by anchor investors in accordance with the Securities and Exchange Board of India Regulations, 2009, as amended (ICDR Regulations). The anchor investor bidding date will be one working day prior to the offer opening date, March 3, 2017. Bids can be made for a minimum of 45 equity shares and in multiples of 45 equity shares thereafter. The sole BRLM to the offer is ICICI Securities limited.
The equity shares offered through the Red Herring Prospectus (RHP) dated February 22, 2017 are proposed to be listed on BSE and NSE. All capitalised terms used herein and not specifically defined shall have the same meaning as ascribed to them in the RHP.