TIPS Industries, Tabassum Int to hit market in Sept

Notwithstanding the sullen mood of IPO investors, two media companies - TIPS Industries and Tabassum International - have decided to tap the public in September.

TIPS Industries is likely to hit the market in the first week of September with its bookbuilding portion, according to a market source. One of the leading music companies in India, TIPS Industries is offering 30 lakh equity shares of Rs 10 each. Of this, a major portion of 27 lakh shares will be offered through the bookbuilding route (90 per cent) and 3 lakh shares at a fixed price.

Both these companies are going public at a time when IPO investors have turned very cautious thanks to the battering of media and IT stocks.

Importantly, the performance of media companies (which had tapped the public in the recent past) in the primary market has not been encouraging, except for TV18. Investors are suffering several crores of capital erosion in Cinevista which is now trading at a 50 per cent discount to its IPO price of Rs 300. Creative Eye had to withdraw its IPO as the company could get a subscription of only 1.25 times of its bookbuilding portion. The recently listed Padmalaya Telefilms is now hovering at around Rs 104 against its offer price of Rs 100. Moreover, Mukta Arts’ Rs 25-crore IPO at a premium of as high as Rs 165 (facevalue Rs 5) just sailed through with a marginal oversubscription of 1.14 times.

Nevertheless, TIPS has firmed up its IPO plan and the company has roped in Anand Rathi Securities Pvt Ltd as the book running lead manager. The shares are proposed to be listed at the stock exchanges of Mumbai and National. Promoted by Taurani family, TIPS Industries is going in for a major expansion. The board also includes names like Shiv Abhichandani, Boney Kapoor, David Dhawan and Shyam Lakhani.

The IPO proceeds will be used for financing the project. The project includes expansion of the current cassette manufacturing facilities, setting up a CD manufacturing plant and a studio for recording music. The company at present has a total capacity to manufacture upto 7.44 crore audio cassettes per annum at Silvassa and Palghar facilities. The company has also plans to increase its market share through acquisitions of more audio rights and forge alliance with overseas companies for distribution and marketing of its music in international markets.

TIPS has already acquired 59 audio rights for films which are under different stages of production at a cost of Rs 34 crore. The company has a library of over 8000 music albums and has acquired music catalogue of Time Audio, Weston, Oriental Music, Swaran Sudha, Rajshri (Gujarati). This catalogue includes film, devotional, classical, regional, and pop music. TIPS currently generates nearly 50 per cent of its revenue from the software library.

The company manufactures and markets pre-recorded audio cassettes, blank audio cassettes and replicated CDs and markets its products under the registered trademark TIPS. Some of the current hits from TIPS include Fiza, Tera Jadoo Chal Gayaa, Deewane, Kunwara and Dhoolhan Hum Le Jayenge and the film music rights include Taal, Raja Hindustani, Sarfarosh and many more.

In the non-film segment, TIPS has recorded and released cassettes of classical and folk music segments. Reputed artists from the film industry and non film music areas are associated with TIPS.

For fiscal 2000, TIPS Industry earned a net profit of Rs 23.32 crore on sales of Rs 115.82 crore. TIPS Indutries is projecting a net profit of Rs 35 crore on total income of Rs 159 crore for the current fiscal ending March 31, 2001. On a post-issue capital of Rs 12 crore, EPS would work out to Rs 29.36 for fiscal 2001 against the actual figure of Rs 25.91 for fiscal 2000 (equity Rs 9 crore).

Jai Kumar NR

More...

T-Series releases Ganapati Bappa Moraya
Old voices for new
Musicurry.com - India’s only legal music website