MUMBAI, Sept 27 (Business Standard): The promoters of private FM station
Radio City 91.1 FM, Music Broadcast Private Limited (MBPL) owned by
private equity firm IVF Holdings Pvt Ltd, are contemplating to come out
with an initial public offering (IPO) in the first quarter of the next
calender year.
The proceeds from the IPO will go into running radio stations across the country, which will include the ones acquired in the third phase of radio auctions.
Apurva Purohit, CEO, Radio City informs that now that the Telecom Regulatory Authority of India (TRAI) has approved the formula for migration of the phase two licenses in phase three, the company has earmarked Rs 2.0 billion for the process.
Another Rs 1.0 to 1.50 billion has been estimated as the cost for acquisition and roll-out of new radio stations across the country.
"We have been able to maintain EBITDA margins of 25 to 30 per cent year on year over the past two to three years and are debt free currently. After internal discussions and deliberations, we have come to the conclusion that between our current cash reserves, fresh equity investment from the promoters and loans from our banks, we will be able to raise the money for license extension and acquisition in phase three," she says.
Purohit adds that the company has had a good record with its banks and is already in discussion with Axis Bank for raising money for the auctions.
"The IPO is being considered to source additional funds so we have flexibility in bidding and are able to get all the stations we require, without being constrained as well as for the capex for setting up the (new) stations," she says.
Radio City is present in 20 cities: Mumbai, Delhi, Bangalore, Chennai, Ahmedabad, Pune, Hyderabad, Lucknow, Jaipur, Vadodara, Surat, Sholapur, Nagpur, Sangli, Coimbatore, Vizag, Ahmednagar, Akola, Nanded and Jalgaon.
The company intends to increase this number to 40 stations post the third phase of radio frequency auctions. The strategy of the company has been to target the SEC A and B sections of the listeners.
Currently, with its 20 stations, Radio City has a market share of around 50 per cent of market share in SEC A and B segment. In order to retain this share after the 800 odd frequencies have been auctioned in phase three, the company will need between 35 to 40 stations.
The proceeds from the IPO will go into running radio stations across the country, which will include the ones acquired in the third phase of radio auctions.
Apurva Purohit, CEO, Radio City informs that now that the Telecom Regulatory Authority of India (TRAI) has approved the formula for migration of the phase two licenses in phase three, the company has earmarked Rs 2.0 billion for the process.
Another Rs 1.0 to 1.50 billion has been estimated as the cost for acquisition and roll-out of new radio stations across the country.
"We have been able to maintain EBITDA margins of 25 to 30 per cent year on year over the past two to three years and are debt free currently. After internal discussions and deliberations, we have come to the conclusion that between our current cash reserves, fresh equity investment from the promoters and loans from our banks, we will be able to raise the money for license extension and acquisition in phase three," she says.
Purohit adds that the company has had a good record with its banks and is already in discussion with Axis Bank for raising money for the auctions.
"The IPO is being considered to source additional funds so we have flexibility in bidding and are able to get all the stations we require, without being constrained as well as for the capex for setting up the (new) stations," she says.
Radio City is present in 20 cities: Mumbai, Delhi, Bangalore, Chennai, Ahmedabad, Pune, Hyderabad, Lucknow, Jaipur, Vadodara, Surat, Sholapur, Nagpur, Sangli, Coimbatore, Vizag, Ahmednagar, Akola, Nanded and Jalgaon.
The company intends to increase this number to 40 stations post the third phase of radio frequency auctions. The strategy of the company has been to target the SEC A and B sections of the listeners.
Currently, with its 20 stations, Radio City has a market share of around 50 per cent of market share in SEC A and B segment. In order to retain this share after the 800 odd frequencies have been auctioned in phase three, the company will need between 35 to 40 stations.
Blogger Comment
Facebook Comment