Midvalley Entertainment plans Rs 60 crore IPO

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Midvalley Entertainment is planning to raise Rs 60 crore from the capital market. It has filed draft red herring prospectus (DRHP) for third time with the market regulator Securities & Exchange Board of India (SEBI). Earlier it had filed DRHP in July 2007 and October 2008.

The company is engaged in the media and entertainment industry in South India. It produces, distributes and exhibits movies both in Indian and foreign languages. It has currently entered into screening agreements with 46 theatres in distribution territories of Hyderabad and Tamil Nadu. It intends to add another 300 screens in B & C category towns by June 2011 and also modernize 100 theatres.

The objects of the issue are to raise capital for financing the activities like (1) entering into screening agreements with 300 cinema theatres; (2) renovation and up-gradation of cinema infrastructure with digital equipment and other related assets for a select 100 screens, and (3) acquisition of company, acquisition of screening rights of company having similar line, range and objects of business. The company plans to spend Rs 15 crore, Rs 25.95 crore and Rs 12 crore for these three objects, respectively.

For the period of 10 months from May 2009 to February 2010, it has reported profit after tax of Rs 30.70 lakh on total income of Rs 8.44 crore.