Mumbai: The company that co-produced Jeans, one of Indian cinema’s most expensive movies, is stepping out in style.
Mid Valley Entertainment, the Chennai-based film production and distribution company, is planning to tap the capital markets with an initial public offering before November in order to raise Rs100 crore. The company, which is promoted by a Malaysian firm, Multi Vest Resources, came into existence in October 2005 with the acquisition of Cee (I) TV, a South India-based production house.
“We plan to have a fresh issue of 90 lakh shares for the IPO and the money will be used mainly for our exhibition business,” said Chandrasegaran, chief operating officer, Mid Valley. The company had a turnover of Rs40 crore for the nine-month period ending January.
The funds will be used to lease and refurbish 350 single-screen theatres in Andhra Pradesh and Tamil Nadu, two southern Indian states, by December 2008. Mid Valley plans to have 500 single-screen theatres by 2010, after which it will expand across India. Besides, Mid Valley, which owns the rights to 1,200 movies, plans to move into IPTV (Internet Protocol Television) shortly. It says it is also in negotiations with production houses to acquire international distribution rights for movies produced in the US and South-East Asia.
The company has leased 60 single-screen theatres in tier II and III towns across Tamil Nadu and Andhra Pradesh. It will look to upgrade at least 250 of its first 350 screens to digital.
“The company will also engage small production houses in the US, Korea, and Thailand to acquire worldwide distribution rights,” said K.K. Easwaran, chairman, Mid Valley.
Mid Valley, primarily a production and distribution house, is now focusing more on exhibition of films by setting up theatres. This highlights a growing trend where firms are moving out of their core expertise to get into new, related businesses.
Many media companies in India are now expanding to include several aspects of the entertainment business.
Smita Jha, senior manager in consultancy firm PricewaterhouseCoopers, says that media companies have, for a while, taken over different and sometimes seemingly disparate aspects of the business.
“Foreign investment in the country is increasing, so the volumes of investment are high, so you see more transactions taking place,” she said. “You’ll see this in media, as well as retail.”