Saturday, January 1, 2011

Midvalley Entertainment IPO - Analysis, Recommendation, Review

Midvalley Entertainment (MVEL), a South India based media and entertainment company, has come out with initial public offering (IPO) of Rs 60 crore.

Midvalley Entertainment is a film production, distribution and exhibition company, actively engaged in the media and entertainment industry in South India. It has presence in the media and entertainment activity from concept to completion i.e. from script to screen. It produces, distribute and exhibit movies both in Indian and foreign languages.

The issue will open on January 10, 2011 and will close for subscription on January 11. The company has fixed a price band of Rs 64 - Rs 70 per share.

The promoters - Unigold Pacific, Kiara Enigma and Global Motion Pictures and Ventures Pte Ltd hold 18.96%, 8.62% and 21.88% stake respectively in the company.

Proceeds from the issue are proposed to be utilised for entering into screening agreements with 300 cinema theatres; renovation and up-gradation of cinema infrastructure with digital equipment and other related assets for a select 100 screens; and acquisition of company, acquisition of screening rights of company having similar line, range and objects of business.

The IPO is proposed to be listed on Bombay Stock Exchange. Aryaman Financial Services limited is the book running lead manager to issue.

Recommendation:
Brickworks Ratings India Pvt Ltd has rated this IPO as Grade 1 which is the least rating for an IPO. We would not recommend investors to invest in this IPO at this time.

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