Deccan Chronicle plans Tamil Nadu launch in Feb

Deccan Chronicle Holdings Limited (DCHL), which is likely to raise Rs 179 crore through an Initial Public Offer (IPO) of 22.3 per cent of its equity, is looking at giving a tough competition to players like The Hindu in Tamil Nadu with its price of Re 1.

"Our major competitor in Chennai "" The Hindu "" has a circulation of 1.94 lakh and we are targeting a circulation of 1 lakh when we launch in February. Our pricing policy will be our unique selling price," T Venkattaram Reddy, chairman of DCHL, told newspersons here today.

DCHL, publishers of Deccan Chronicle and Andhra Bhoomi, is entering Tamil Nadu with an investment of Rs 100 crore and is likely to expand through new editions and acquisitions.

It will also start its editions in Trichy and Coimbatore by October next year.

"The expansion will be in our own region and in the niche market of English dailies. Wewill not venture into vernacular languages," he said.

"We expect the turnover to grow by 55 per cent to Rs 190 crore and the net profit to almost double this financial to Rs 35 crore against Rs 18 crore last year," Reddy said.

DCHL public offer through 100 per cent book-built route will open November 25 and will offer 8,013,100 equity shares plus a green shoe option of 1,201,960 equity shares of Rs 10 each. The price band has been fixed at Rs 162-194 and it closes on December 2.

"We are expecting a boost in revenues through enhanced advertising rates, especially as we started colour printing from August this year. Our ad rates are Rs 1,200 for black and white and Rs 2,400 for colour. This will fetch higher price," Reddy said.

"Also, we are targeting a good circulation because of low price," he added.

About 60 per cent of the issue has been reserved for allotment to qualified institutional buyers (QIBs) on a discretionary basis and another 15 per cent to non-institutional bidders.

The retail investors would be allotted 25 per cent of the issue.

The issue would constitute about 20 per cent of the fully diluted post offer paid-up capital assuming that the green shoe option is not exercised, and about 22 per cent assuming that the green shoe option is exercised in full.

Reddy said that the recent controversy regarding International Herald Tribune (IHT) did not have much impact on the turnover of the company. "We have not violated any law and it is upto the Group of Ministers to take decision on the issue. IHT is doing good with a circulation of 30,000," he said.

New markets

• Deccan Chronicle Holdings Limited is likely to raise Rs 179 crore through an Initial Public Offer of 22.3 per cent of its equity
• It is planning to launch in Tamil Nadu with its price of Re 1
• DCHL is entering Tamil Nadu with an investment of Rs 100 crore
• The publishing house also plans to start its editions in Trichy and Coimbatore by October next year