Regional media house Amar Ujala Publications Ltd has filed its draft red herring prospectus (DRHP) with securities market regulator SEBI to float its initial public offer (IPO).
The proposed public issue comprises fresh issue of equity shares to raise up to Rs 50 crore ($7.9 million), besides an offer for sale which would lead to part-exit for its existing public shareholder Pun Undertakings Network Pvt Ltd, besides shares on offer by its promoters.
This is the sixth company to file documents for an IPO this year. The other companies are Shree Shubham Logistics Ltd, SSIPL Retail Ltd, AGS Transact Technologies Ltd, S.H. Kelkar & Co. Pvt Ltd besides Pennar Engineered Building Systems.
Amar Ujala would join larger peers such as Blackstone-backed Jagran Prakashan (Dainik Jagran) and DB Corp (Dainik Bhaskar) among the listed stock of Hindi language newspapers.
Here's a snapshot of the IPO
* IPO comprises fresh issue of shares to raise up to Rs 50 crore ($7.9 million) in addition to an offer for sale of 2.7 million equity shares by Pun Undertakings Network, Rajul Maheshwari, who took over the charge after the demise of elder brother Atul Maheswari.
* Bankers: Axis Capital and IDFC Securities.
Use of proceeds
* Of the proceeds of the fresh issue, it would use Rs 31.4 crore to purchase printing machines for expansion of the existing capacity, Rs 7.8 crore for expanding OOH (out-of-home) advertising services and 0.8 crore for digital business while the remaining would be used for general corporate purposes.
Company
* It was founded by Murari Lal Maheshwari and Dori Lal Aggarwal in Agra in 1948. The business later expanded and the firm has now become a regional media house with operations spread across north India.
* A decade ago a dispute arose between co-promoter Maheshwari and Aggarwal families. It was settled in 2013 with Aggarwal family moving out as shareholders and now Maheshwari family led by Rajul Maheshwari runs the firm.
* The flagship Amar Ujala newspaper is now published in 19 editions in Uttar Pradesh, Uttarakhand, Himachal Pradesh, Jammu & Kashmir, Punjab and Haryana as well as union territories of New Delhi and Chandigarh.
* It also publishes a Hindi daily tabloid newspaper, Amar Ujala Compact, in six editions in Uttar Pradesh, with a combined readership of 2.59 million readers per day.
* In addition to news and current affairs print media business, the firm publishes educational books, under the publication series ‘Amar Ujala Education Books’, and educational magazines. It also publishes a niche monthly magazine providing study material for civil services and other examinations.
* The media firm has 18 publishing facilities with a total installed capacity of approximately 3.78 million copies per day.
* Amar Ujala has a daily readership of approximately 30.13 million; average circulation was approximately 1.95 million copies per day during first half of 2014. It clocked a 14.98 per cent growth in circulation during January-June 2014 over the year-ago period.
* Around two-thirds of its revenues come from ad income with subscription bringing around a quarter of income. Rest comes from other business lines.
Financials
* For the nine months ended December 31, 2014 it had net revenues of Rs 571.6 crore with net profit of Rs 26.56 crore. For the financial year ended March 31, 2014, the company posted net revenues of Rs 636.25 crore against Rs 541 crore in FY13. Its net profit rose from Rs 18.5 crore to Rs 25 crore in the same period.
Investor
* Hedge fund manager DE Shaw Group invested in the company, picking 18 per cent stake back in 2007. Later, the investor and the promoters were locked in a legal dispute over a proposed exit call by DE Shaw and the promoters accusing it of violating certain foreign investment rules.
* The case was settled in 2012 and DE Shaw's stake was sold to a little known private firm Pun Undertakings Network. Although separate media reports had said the stake was bought by Maheshwari family, this firm is not listed as part of the promoters. Through this IPO, it is selling a part of its holding.
(Edited by Joby Puthuparampil Johnson)
