MUMBAI: Amar Ujala Publications, publisher of Hindi daily Amar Ujala, has filed a draft red herring prospectus (DRHP) with market regulator Securities and Exchange Board of India (SEBI) to raise funds via initial public offer (IPO).
The offer comprises a fresh issue of up to 50 crore (500 million) shares and an offer for sale (OFS) of up to 26.9 lakh (2,690,234) equity shares by promoters Rajul Maheshwari, Sneh Lata Maheshwari and Pun Undertakings Network Private Limited.
While the proceeds from the OFS will directly go to the respective shareholders and the company won’t be getting any amount from that, Amar Ujala intends to utilise the net proceeds from the fresh shares towards purchase of printing machines and hoardings for expansion and for investment in a subsidiary.
As per the draft prospectus, the net proceeds will be used for:
Rs 31.49 crore (Rs 314.91 million) for purchase of printing machines for expansion of the existing capacity.
Rs 7.88 crore (Rs 78.83 million) for purchase of hoardings to expand into providing OOH advertising solutions.
Rs 87.5 lakh (Rs 8.75 million) for investment in subsidiary for expansion of digital business; and
General corporate purposes.
The company said that it does not intend to utilise the net proceeds to procure any second hand plant and machinery or miscellaneous fixed assets.
It also said that the net proceeds will not be used to meet the working capital requirements. “We expect to meet our working capital requirements in the future through internal accruals, drawdowns from our existing debt facilities or availing new lines of credit,” the draft mentioned.
Axis Capital and IDFC Securities are the book running lead managers, while Link Intime India is registrar for the issue.
Financials
The revenue for the nine months ended 31 December 2014 stood at Rs 573.03 crore (Rs 5.73 billion). The company reported a net profit of Rs 26.66 crore (Rs 266.65 million).
For the fiscal ended 31 March 2014, revenue was at Rs 640.34 crore (Rs 6.40 billion), up 17.68 per cent from Rs 544.15 crore (Rs 5.44 billion) a year ago.
Net profit for FY14 stood at Rs 25.01 crore (Rs 250.10 million), up 35.08 per cent from Rs 18.51 crore (Rs 185.15 million) in the year-ago period.
Shareholding
The promoters and promoter group hold 9 million shares in Amar Ujala Publications, amounting to 82 per cent of pre-IPO equity. Out of this, both Rajul Maheshwari and Sneh Lata Maheshwari own 2.086 million shares each, or around 19 per cent of the pre-IPO capital each.
Antarctica Finvest Private Limited owns 3.18 million shares, amounting to 28.97 per cent stake in the company, while Northern India Media Private Limited owns 14.02 per cent.
Tanmay Maheshwari and Varun Maheshwari own a 0.5 per cent stake each.
The remaining 18 per cent stake is with Pun Undertakings Network Private Limited.
Amar Ujala
The company claims that Amar Ujala, its flagship brand, is India’s fourth largest daily newspaper in terms of total readership (Source: IRS 2012Q4).
The average circulation of Amar Ujala was approximately 1.95 million copies per day during the first half of 2014, as per ABC (Audit Bureau of Circulation).
First published in the late 1940s in Agra, the daily is now published in 19 editions in the states of Uttar Pradesh, Uttarakhand, Himachal Pradesh, Jammu & Kashmir, Punjab and Haryana as well as New Delhi and Chandigarh.
In addition to the news and current affairs print media business, the company also publishes educational books and magazines.