Media floats to rake in Rs 3000 cr

Media and entertainment companies are the flavour of the day in the Indian stock market. According to the data released by Prime Database, 18 media companies will float public issues drawing about Rs 3,000 crore.

This is a three-fold increase from the Rs 1,200 crore the six media companies raised through IPOs last year.

Global Broadcast News (CNN-IBN) and Cinemax India already announced their issues this month.

"It is a booming industry across print media, films and television and production and distribution. This sector has been almost entirely out of the listing domain, unlike most developed markets. We will witness a huge listing activity in the coming years," Managing Director Prime Database Prithvi Haldea said.

Four companies "" Brahma Interactive, Broadcast Initiatives, Raj Television Network and SRS Entertainment "" are awaiting approval from the Securities and Exchange Bank of India (Sebi).

The estimated amount to be generated by these four companies is Rs 313.50 crore. In addition to that 12 other initial public offers are in the pipeline summing up to a total of Rs 2,590 crore, according to Prime Database.

Other big IPOs lined up are Sony's SET India (Rs 900 crore), DQ Entertainment (Rs 400 crore) and Indian Express Newspapers, Mumbai (Rs 200 crore).

Abneesh Kumar Roy, a research analyst with Religare Securities, said, "At present the stock market is very buoyant, which means it is easy to raise money currently. Most of the media and entertainment companies are looking at expansions and diversifications to quench consumers' rising demands. Investors are considering media and entertainment shares now because it is a secure investment since the demand for media and entertainment will always prevail."

Last year's six entrants "" Entertainment Network (India), Inox Leisure, Sun TV, Prime Focus, Pyramid Saimira Theatre, Shree Ashtavinayak Cine Vision "" raised Rs 1257.56 crore.

Currently, their stock prices have substantially increased. Sun TV which entered the capital market on April 3, 2006, with an offer price of Rs 875 today has a share value of Rs 1520.25.

Even as the year ended, Shree Ashtavinayak Cine Vision's offer price of Rs 160 (as on December 12, 2006) has seen a considerable increase in its share value and presently it stands at Rs 225.

What has also contributed to the sudden rush is the liberalisation of the media sector. Apart from string economic growth and public policy, liberalisation of the media sector have played a key role in encouraging investments in this sector and will continue to do so.

Higher investments will open up new opportunities and will propel the growth of the media sector, according to Religare Research.