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Adlabs Films' IPO in November

Adlabs Films Limited, a company engaged in the processing of advertising and commercial films and founded by Manmohan Shetty and Vasanji Mamania in 1978, is entering the capital market in early November with a public issue of 44,00,000 equity shares of Rs 5 each for cash at a premium ranging from Rs 115 to Rs 139 per share to raise a sum of Rs 600 million.

The public issue is meant to pay back bridge loans of about Rs 180 million to the commercial banks and also finance the ongoing construction works of the multiplex theatre project including Imax Dome theatre at Wadala in central Bombay and also finance the import of equipment for the theatre that would have a total capacity of 1,225 seats.

Shetty said that the company intended to prepay the unsecured loan of Rs 23.6 million availed from Artco if the price of the shares is fixed at Rs 139 per share or more. However, the final pricing of the issue would be decided before filing the offer document to the regulatory authorities in the next couple of weeks.

The fund requirements and the means of finance are estimated by the company and have not been appraised by any bank or financial institution. After the public issue, the shareholding of the promoters will come down from the current 100 per cent to 78 per cent.

The company which processed films for almost all major production companies, has earned a net profit of Rs 51.7 million in the 1999-2000 on a total income of Rs 368.3 million, an increase of 21 per cent from the previous year. The net worth of the company has increased to Rs 127.1 million from Rs 108.6 million in the previous year.

UNI

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