Mumbai: Music Broadcast Ltd, which operates the Radio City FM station, on Monday said it will launch its initial public offering (IPO) on 6 March.
The company has fixed a price band of Rs324-333 per share for its initial share sale. The company 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 offer closes on 8 March.
The firm has hired ICICI Securities Ltd to manage the IPO. Music Broadcast plans to use the proceeds of the share sale to reduce its debt and for general corporate purposes.
Music Broadcast will be the second IPO this year following stock exchange BSE Ltd’s initial share sale last month. In 2016, 26 companies 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 company Jagran Media Network Investment Pvt. Ltd is backed by global private equity firm Blackstone, which invested Rs225 crore in 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 now present in 37 cities, including Bengaluru, Mumbai, Chennai, Pune, New Delhi, Hyderabad and Ahmedabad. As on 31 March 2016, the radio station reached out to over 49.6 million listeners in 23 cities covered by market research and consulting firm AZ Research, the company said in red herring prospectus.
Under the Phase III FM radio policy, under which new cities were opened up for auction, Music Broadcast got licences to operate in 11 more cities: Patna, Madurai, Nashik, Kolhapur, Udaipur, Ajmer, Kota, Bikaner, Jamshedpur, Patiala and Kanpur.
In addition to having a presence in 37 cities, Music Broadcast has a sales alliance with ITM Software and Entertainment Pvt. Ltd, which operates Suno Lemon 91.9 FM in Gwalior, and Ananda Offset Pvt. Ltd, which operates Friends 91.9 FM in Kolkata.
It also operates online radio on its web portal Planet Radio City. It operates 40 web radio stations through planetradiocity.com in eight languages.
In the six-month period ended on 30 September 2016, Music Broadcast had a revenue of Rs1,38.2 crore, Ebitda (earnings before interest, taxes, depreciation and amortization) of Rs45.5 crore and profit of Rs29 crore.
In the fiscal year ended 31 March 2016, it had revenue of Rs 2,45.5 crore, Ebitda of Rs78.5 crore and profit of Rs42.5 crore. Music Broadcast’s revenue has grown at a compound annual growth rate of 20.4% between fiscal years 2013 and 2016.
HT Media Ltd, the publisher of the Hindustan Times and Mint, competes with Music Broadcast in some markets.