Deccan investors to get Odyssey India shares in 2:1 ratio

Deccan Chronicle Holdings' shareholders will receive two shares of the soon-to-be-listed retail chain Odyssey India for every share they hold in the former. Odyssey India is expected to be listed in May.

The board of Deccan Chronicle Holdings, the publisher of the English daily Deccan Chronicle, yesterday decided to distribute its holding in Odyssey to its shareholders by way of the scheme of arrangement under section 391-394 of the Companies Act, 1956 for free.

The scheme would be implemented following the completion of Odyssey's initial public issue. Odyssey India will file the prospectus for the issue with the market regulator the Securities and Exchange Board of India in the first week of March.

Post-issue, Deccan Chronicle's holding in Odyssey India will come down to 74 per cent from the current 100 per cent. Its shareholders will receive 7.49 crore shares of Odyssey India against their holding of 4.12 crore shares in Deccan Chronicle.

A back-on-the-envelop calculation indicates that they would receive 1.81 shares of Odyssey India for every share they hold in Deccan Chronicle.

Odyssey India, whose shares will have a face value of Re 1 each, will have an equity base of Rs 10.12 crore. The Deccan Chronicle board has also decided to appoint KPMG consultant for preparing the company's financial results for the year ending March 31, 2006 as per the IFRS standards.

Sources close to Odyssey India said the company might price the IPO at Rs 50 a share. "The pricing may be more than 25 times future earnings of the company," they said.

This pricing would value Odyssey at Rs 500 crore.

Odyssey India is a 12-year-old retail chain with 61,000 sq ft of retail space across 12 stores in six cities "" Chennai, Hyderabad, Coimbatore, Salem and Trichy, and Varanasi. It deals in books, gifts, toys, stationery and music products. Deccan Chronicle acquired the chain in September 2005 for Rs 61 crore.

Odyssey is on track to close the financial year ending September 2006 with an earnings per share (EPS) of Rs 10. Its EPS is expected to go up to Rs 20 in September 2007, with a topline of Rs 125 crore.

It has secured space in Mumbai, Nagpur, Calicut, Kochi, Bangalore, New Delhi, Vishakapatnam, Pune, Aurangabad and Mysore, apart from two new large-format stores in Coimbatore and Hyderabad.