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Broadcast Worldwide plans Rs. 100 cr. IPO

The Rathikant Basu-run Broadcast Worldwide is planning to come out with an initial public offering of around Rs. 100 crore in the next 6-12 months.Though the price of the issue is yet to be fixed, Basu said he was looking at a minimum band of Rs. 150-200 per share. “The market situation would determine the price. But we would not like to drop below that level,” Basu said.The proceeds of the issue will be used to fund the launch of the four regional channels under the brand TARA. Besides, Broadcast Worldwide is launching a portal which will have, besides others, content from its language channels with video streaming facilities.

The company has roped in Ambit to arrange its second round of venture capital funding. Broadcast Worldwide plans to raise Rs 24 crore through private placement at a premium of Rs. 40-50. “We will be able to raise the entire amount within four weeks,” said Ambit managing director Ashok Wadhwa. Broadcast Worldwide plans to raise Rs. 50-60 crore in the next phase after two-three months. “We are looking at a premium of Rs. 90 per share. We are also tapping institutional investors,” Basu said. In the first round, the company raised Rs. 10 crore. The private placement was arranged by Arthur Andersen. Broadcast Worldwide has a host of investors. Though Basu did not disclose the names as the shareholding meeting is yet to take place, sources said Gujarat Venture Finance Ltd. has invested Rs. 6 crore. Rupert Murdoch’s News Corp has a five per cent stake in the company, with the option of increasing it to 20 per cent.

The four language channels - Bangla, Marathi, Gujarati and Punjabi - will require an investment of around Rs. 130-135 crore over three years. “We want to tap the market in six months. The amount of the issue and its timing may vary, depending on the situation,” Basu said.
Ambit, however, is recommending an IPO of Rs. 100 crore. “This will include the fund requirement for contingencies and the Internet venture,” Wadhwa said. Basu believes in a low debt equity company. “Media companies should ideally have low debt and more equity,” he said.

Basu plans to break even in three years. The revenue projection for the year ending March 31, 2001, is Rs. 20 crore, sources said. The turnover for the third year is estimated at Rs. 100 crore. While advertising is the main source of revenue, subscription is expected to account for just five per cent of the income. The regional channels may be encrypted three months after operations.

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