LS Digital plans to file for an IPO

After being in existence for over a decade-and-a-half and acquiring three partner agencies- Langoor, F1 Studioz and Social Panga, in the past year, LS Digital is also aiming to file for an Initial Public Offering, as per Co-Founder and CEO, Prasad Shejale.

While aspiring to replicate what TCS accomplished in the IT sector during the 1990s, the digital marketing player is optimistic about LS Digital achieving an EBIT of Rs 90-100 crores this year, now that the group has established specialised agencies to handle all six facets of customer journeys on digital platforms.

“Now that the group has become ‘sizably big’ what needs to work well before we actually hit the market with an IPO is the integration. In fact, for me and the team, the IPO will not at all be the end or exit, but our entry into the global market to raise funds, acquire bigger companies, set up bigger offices, reach out to the bigger customers and make a bigger marketing push,” he said.

In the past, LS Digital had also raised private equity funding from Florintree Advisors who were onboarded as secondary co-founders. These funds were utilised to build existing capabilities while also considering the inorganic route for growth

That being said, the group soon realised that raising funds and diluting oneself is not the best of plans which is why it went on to venture debt from Blacksoil since the ability of servicing the debt seemed a pretty good one to the company.

F1 Studioz, in Shejale’s viewpoint, is ‘very strong’ in Europe and the US, so much so that almost 85% of their business comes from the non-India market and Langoor is already in a global space where almost 72% of their revenue comes from outside India.

“The first integrated sales office that we have set up in Dubai is exponentially growing. We have already hired salespeople in the UK and are in the process of setting up a sales office in the US. But, the Middle East has definitely become the best market for us from the integrated perspective as it has been a big success for us. Hence, we are going to replicate that story in Europe, starting with the UK, followed by the US,” he added.

This comes at a time when integrated marketing services provider, RK Swamy, filed the draft papers with capital markets regulator SEBI to mobilise funds through an Initial Public Offering (IPO).

Comprising of a fresh issue of shares aggregating up to Rs 215 crore and an offer for sale (OFS) of up to 87 lakh equity shares by selling shareholders, according to the Draft Red Herring Prospectus (DRHP), the company will be utilising the funds raised for setting up a digital video content production studio, establishing new customer experience centres and computer-aided telephonic interview centres as well as for general corporate purposes.

Earlier this year, India’s homegrown integrated advertising agency, Crayons Advertising, also went public with its IPO being oversubscribed by 147.61 times, leading to a subscription worth Rs 4,104.67 crore.

The agency had then announced its plans to tap the international advertising markets through tie-ups with independent agencies and acquisitions in countries like the Middle East, US and UK.

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