The Dainik Jagran group, publishers of India’s third-largest Hindi daily, has bought a stake in Chennai-based EdServ, an education and placement company.
EdServ told the National Stock Exchange its board of directors met today and approved the issue of Rs 10 crore of equity warrants to the Jagran group.
The price of the warrant shall be based on the Issue of Capital and Disclosure Requirements rules of the Securities and Exchange Board of India,subject to approval by of an extraordinary general body meeting of its shareholders, said EdServ.
In May, HT Media and Bennett, Coleman & Company, the respective publishers of Hindustan Times and The Times of India, had also taken a stake in EdServ, through equity warrants. HT Media paid Rs 15 crore and the TOI group Rs 10 crore.
These warrants have a lock-in period of 18 months, after which they get converted to equity. The total equity dilution in this exercise, involving all three media groups, would be 22 per cent of the equity capital, involving 3.3 million equity shares, said S Giridharan, chairman and CEO, EdServ.
EdServe earlier announced it was planning to raise Rs 130 crore for nationwide expansion of its business. This dilution is part of that exercise.
“There will not be any more dilution of equity beyond what is issued now,” he said.”We are now well-funded for pan-India expansion. We are confident of achieving revenues of Rs 150crore and net profit of over Rs 40 crore for financial year 2011.”