Mumbai: Music Broadcast Ltd, which operates the Radio City FM station, on Friday said it raised Rs146.5 crore by allotting shares to anchor investors as part of the so-called anchor book allocation, a day ahead of its initial public offering (IPO).
Anchor book is that portion of an IPO that bankers can allot to institutional investors on a discretionary basis. Anchor book subscription opens a day before the launch of an IPO and acts as an indicator of institutional investor interest.
Shares were allotted to anchor investors at Rs333 apiece, the upper end of the IPO price band of Rs324-333 per share.
Investors who participated in the anchor book allocation include funds from financial institutions HSBC, Nomura, Franklin Templeton, DSP Blackrock, Reliance Capital, ICICI Prudential, HDFC Standard Life Insurance and Birla Sun Life Insurance, among others.
In the IPO, which opens on 6 March, Music Broadcast plans to raise up to Rs400 crore in primary capital, while existing investors will sell shares worth Rs86-88.5 crore through an offer for sale. The IPO closes on 8 March.
Music Broadcast plans to use the proceeds of the share sale to pare debt and for general corporate purposes. The company has hired ICICI Securities Ltd to manage the offering.
Music Broadcast’s will be the second IPO this year after stock exchange BSE Ltd’s initial share sale last month. In 2016, 26 firms raised Rs26,493 crore through IPOs, data from primary market tracker Prime Database shows.
Music Broadcast is promoted by Jagran Prakashan Ltd, a media group with interests in print, radio, digital, out of home and brand activations. Jagran publishes 10 print titles in five different languages across 13 states in India and has over 400 editions and sub-editions. These include Dainik Jagran and Inquilab.
Jagran Prakashan’s holding firm Jagran Media Network Investment Pvt. Ltd is backed by global private equity firm Blackstone, which invested Rs225 crore in 2010. Jagran Prakashan had acquired Music Broadcast in December 2014 for around Rs500 crore, entering the radio business.
Radio City, which started operations in four cities in 2001, is present in 37 cities, including Bengaluru, Mumbai, Chennai, Pune, New Delhi and Hyderabad. As on 31 March 2016, the radio station’s reach extended to more than 49.6 million listeners in 23 cities, as per market research and consulting firm AZ Research, the firm said in its red herring prospectus.
Under Phase III of the FM radio policy wherein new cities were opened up for auction, Music Broadcast won licences to operate in 11 more cities: Patna, Madurai, Nashik, Kolhapur, Udaipur, Ajmer, Kota, Bikaner, Jamshedpur, Patiala and Kanpur.
In the six months to September 2016, Music Broadcast posted a revenue of Rs138.2 crore, Ebitda (earnings before interest, taxes, depreciation and amortization) of Rs45.5 crore and profit of Rs29 crore.
HT Media Ltd, the publisher of the Hindustan Times and Mint, competes with Music Broadcast in some markets.