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    Ashika Research - Equities

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    IPO Note: UFO Moviez India Ltd.

    Issue Snapshot

    Company Name UFO Moviez India Ltd.

    Issue Size Rs. 600 Crore

    The Offer Public issue of 96,00,000 97,56,098 Equity Shares. (Comprising of Offer for Sale of Equity Shares by 3i Research Mauritius Limited and P5 Asia Holding Investments (Mauritius) Limited)

    Issue Opens April 28, 2015 to April 30, 2015

    IPO Process 100% Book Building

    Face Value Rs. 10.00

    Price Band Rs. 615 to Rs. 625

    Bid Lot 24 Equity Shares and in multiples of 24 Equity Shares thereafter.

    IPO Grading NA

    Exchanges NSE & BSE

    BRLM Axis Capital Ltd., Citigroup Global Markets India Pvt. Ltd.

    Registrar Karvy Computershare Private Limited

    Industry: Media and Entertainment Recommendation: Subscribe Date: April 24, 2015

    Equity Shares offered through this Offer Amt*

    (Rs. Cr.) As a % of total

    Nos. of Share

    Lower Band Upper Band

    Equity Shares offered through this Offer 600 100.0% 9756098 9600000

    - Offer for sale 600 100.0% 9756098 9600000

    I. QIB Portion (Not more than ) 300 50.0% 4878049 4800000

    - Anchor Investor Portion (upto 60% of the QIB Portion)

    - Mutual Funds only (5% of the QIB Portion)

    II. Non-Institutional Portion (Not less than) 90 15.0% 1463415 1440000

    III. Retail Portion (Not less than) 210 35.0% 3414634 3360000

    *Note: Amount calculated on the basis of upper price band

    Pre and post Issue Equity Shares Nos. of Share

    Equity Shares outstanding prior to the Issue 2,58,97,669

    Equity Shares outstanding after the Issue 2,58,97,669 2,58,97,669

    1008, Raheja Centre, 214, Nariman Point, Mumbai-400 021, Ph- 022 6611 1700, Extn. - 704 www.ashikagroup.com

    Objects of the Offer

    The objects of the Offer are to achieve the benefits of listing the Equity Shares on the Stock Exchanges and for the

    sale of Equity Shares by the Selling Shareholders. Further, the Company expects that listing of the Equity Shares will

    enhance its visibility and brand image and provide liquidity to its existing shareholders. The Company will not

    receive any proceeds of the Offer and all the proceeds of the Offer will go to the Selling Shareholders.

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    Ashika Research - Equities

    2 1008, Raheja Centre, 214, Nariman Point, Mumbai-400 021, Ph- 022 6611 1700, Extn. - 704 www.ashikagroup.com

    About the company

    The Company was originally incorporated as a private limited company under the

    name of Valuable Media Private Limited on June 14, 2004. The company was

    converted into a public company and its name was changed to UFO India Limited on

    November 10, 2006. Further, pursuant to a scheme of amalgamation the erstwhile

    holding company, UFO Moviez Limited, was amalgamated with and into UFO India

    Limited. Subsequently, the name of the Company was changed to UFO Moviez India

    Limited and a fresh certificate of incorporation consequent upon change of name was

    issued by the RoC on June 12, 2008.

    The company was promoted by Shri Sanjay Shankar Gaikwad, Shri Narendra Hete,

    Valuable Technologies Limited, Valuable Media Limited and Apollo International

    Limited. At present, Shri Sanjay Shankar Gaikwad, is the Managing Director (Executive

    Non- Independent Director) of the Company. He has been associated with the

    Company since incorporation. Shri Kapil Kumar Agarwal is the Joint Managing Director

    (Executive Non-Independent Director) of the Company. 3i Research Mauritius Limited

    and P5 Asia Holding Investments (Mauritius) Limited has made investments in the

    company.

    Business Overview

    UFO Moviez Limited, Indias largest digital cinema distribution network and incinema

    advertising platform (in terms of numbers of screens) as at October 31, 2014,

    according to CRISIL. The Company operates Indias largest satellitebased, digital

    cinema distribution network (in terms of numbers of screens) using their UFOM4

    platform, as well as Indias largest DCinema network (in terms of numbers of screens),

    according to CRISIL. In fiscal year 2014, they digitally delivered more than 1,500

    movies in 22 languages to 4,703 screens with aggregate seating capacity of

    approximately 2.15 million viewers spread across India. Since the beginning of their

    operations, they have digitally delivered more than 8,800 movies in India until

    February 28, 2015. As at February 28, 2015, their global network spans 6,626 screens

    worldwide, including 4,911 screens across India and 1,715 screens across Nepal, the

    Middle East, Israel, Mexico and the USA.

    Promoters 38%

    Foreign Venture Capital

    Investors 36%

    Public 26%

    Promoters 38%

    Public 62%

    Post-Issue (Calculated: Upper Price Band)

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    Ashika Research - Equities

    3

    The Company believes their digitization and delivery model has been a key driver of

    extensive digitization of Indian cinemas and has enabled widespread, same day

    release of movies across India. Prior to the advent of digital cinema exhibition, movies

    were exhibited using analogue celluloid prints, which involved a high upfront

    production cost and required distributors to physically deliver the prints to cinemas.

    As distributors were unable to predict the actual demand for a movie, they were often

    unable to produce an optimal number of prints, either producing too few prints,

    leading to potential loss of revenue, or too many prints, leading to excess expenses.

    This challenge, together with the logistical challenges of physically delivering heavy

    celluloid prints, limited the widespread release of movies across India. As there were

    only a limited number of physical reels available for each movie, only cinemas in

    metropolitan areas and large cities would generally receive movies during their first

    week of release. Cinemas outside of those areas would generally receive used

    physical reels a few weeks after their initial release. This delay, coupled with the lack

    of any inherent security measures in celluloid prints to prevent piracy, meant that

    customers in those locations would generally have had access to the movies via

    pirated media, leading to potential loss of revenue for distributors and exhibitors and

    a poor viewing experience for audiences due to the viewing of lowquality pirated

    media.

    Company adds value to all stakeholders in the movie value chain, spanning movie

    producers, distributors, exhibitors and the cinema-going audience. They provide value

    to movie producers and distributors by reducing distribution costs, providing reach to

    a wide network of over 4,911 screens across India as at February 28, 2015, providing a

    faster method of delivery of content and reducing piracy through encryption and

    other security measures. They provide value to movie exhibitors throughout India by

    providing access to first day release of movies on their digital platform. Audiences

    benefit from faster access to new movie releases and a consistently high quality

    viewing experience. Company has an overall 54% market share in Indias digital

    cinema exhibition industry in terms of screens that use digital cinema distribution

    networks, as a result of which, almost every film released in India is released on

    companys network.

    UFO has created a pan-India, high-impact, in-cinema advertising platform with

    generally long-term advertising rights to 3,770 screens, with an aggregate seating

    capacity of approximately 1.85 million viewers and a reach of over 1,800 locations

    across India, as at February 28, 2015. Companys in-cinema advertising platform

    enables advertisers to reach a targeted, captive audience with high flexibility and

    control over the advertising process. Their in-cinema advertising platform offers a

    number of key advantages over traditional advertising methods, including 1) High

    levels of transparency, such as logging of actual advertisements played, enhances

    advertiser confidence, 2) Remote capability (in approx. 3,330 screens) which allows

    for last minute scheduling and content changes, and 3) Advanced technology, such as

    multilingual support. Further, their in-cinema advertising platform simplifies the

    logistics of advertising, as they control and arrange advertising on their network,

    eliminating the need for advertisers to deal with a large and fragmented group of

    exhibitors. Company has been able to attract 1,056 advertisers from private and

    government sectors in Fiscal Year 2014. The consolidated Advertisement revenue

    grows at a CAGR of 64.21%. UFOs in-cinema advertising platform also allows small

    exhibitors who otherwise are not able to effectively monetize their advertising

    inventory due to their limited scale and reach to receive a greater share of

    advertisement revenue than they are able to using traditional advertising methods.

    1008, Raheja Centre,

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