Anil Ambani is planning another initial public offer (IPO). After Reliance Power and Reliance Infratel, Reliance-ADA Group company Reliance Entertainment is now understood to be finalising plans for an IPO.
The company is expected to file the Draft Red Herring Prospectus (DHRP) with the Securities and Exchange Board of India (SEBI) soon after the budget. Reliance Infratel, which had filed the DHRP prospectus on February 4, would receive the mandatory approval in the next 15 days.
For the Reliance Entertainment issue, Kotak Mahindra and JM Financials are likely to be the investment bankers. A spokesperson for the ADA Group said: “We do not want to comment on speculation.” An analyst with a Mumbai-based research firm said: “Right now, it is difficult to arrive at a valuation for Reliance Entertainment. There could be restructuring of the company’s businesses. This could involve transferring certain related businesses to Reliance Entertainment.”
After soaring to their peaks, valuations of entertainment companies have taken a major hit during the recent market meltdown. While TV 18 has a market capitalisation (price multiplied by the number of traded shares) of Rs 4,961 crore as on February 6 2007, UTV’s market capitalisation was at Rs 1,961 crore.
The group has put all its new-age businesses like gaming and home entertainment under Reliance Entertainment. While Zapak is company’s gaming business, BigFlicks is its home entertainment venture.
The company is also eyeing a presence in the television segment through channels it has planned to launch. “Reliance Entertainment is taking its time to decide whether the IPO should be timed before the launch of its DTH service-Big TV or after it,” said the executive of an entertainment channel.