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DQ entertainment in expansion mode

The 7-year-old animation co plans to use a part of the IPO proceeds for acquisitions and mostly to set up new production houses in India, reports Saurabh Turakhia.

business Updated: Dec 21, 2007 23:10 IST
Saurabh Turakhia

DQ Entertainment, the 7-year-old animation company that recently listed on the Alternative Investment Market (AIM) of the London Stock Exchange (LSE) with an IPO that raised $56 million, now plans to use a part of the IPO proceeds for acquisitions and mostly to set up new production houses in India.

Speaking to Hindustan Times, Tapaas Chakravarti, chairman and CEO of DQ Entertainment, said, “We are setting up units in Navi Mumbai, Kolkata and Chennai in six months. In addition, the expansion will also take place at Hyderabad, where we have 8 production facilities. There are plans to open another unit in the next 3-4 months. Around $8-9 million would be used for the expansion.”

Chakravarti said that 18 per cent of the funds raised would be used for acquiring intellectual property rights of popular characters. The company is working on outsourcing projects involving Disney, Mattel Toys, Electronic Arts, among others. It is also working on in-game animation for Simpsons, Harry Potter, the Fantastic Four among others. Of its current projects, 40 per cent is outsourcing work, while the rest is related to co-productions with players like Marvel Comics and American Greetings.

Till now, the company’s focus has been in operations outside India, but it now intends to look at the Indian market seriously. It plans to roll out animated Bollywood feature films as well as TV content beginning 2009, through a new media division it set up a year ago.

“We are in talks with the top Bollywood production houses for distribution in the Indian market and would also scout for an international partner for de-risking,” he said. The content would be based on superheroes that ordinary people can relate to.

Chakravarti expects a turnover of $25 million by March 31, 2008. The EBITA (earnings before interest, taxes and amortisation) would be over 40 per cent of the turnover.

The firm has acquired a 20 per cent stake in Method Films and also struck a 51:49 joint venture with Onix Films of France, besides signing a memorandum of understanding with Ireland’s post-production unit Telegael.