According to the draft offer document filed with Sebi, one of the main objectives of the current issue is financing of various new joint ventures for setting up of new production units to meet higher volumes of TV software production. Also, in a joint venture with Penta Media Software, Padmalaya Tele plans to set up a studio for 2D/3D animation, cartoons and other entertainment software.

Among the other objectives of the issue, the company will be augmenting its long-term working capital and keep funds for future procurement of Telegu and Hindi feature films for its library.

The total project cost is pegged at Rs 42.25 crore of which Rs 22 crore is being met from the public issue proceeds and Rs 10.80 crore will be met by capital receipts from Reliance Capital. The balance Rs 9.45 will be brought in by the promoters and their friends.

For the fiscal year ended September 1999, Padmalaya Tele had earned a net profit of Rs 3.64 crore from a total turnover of Rs 17.82 crore.

Padmalaya Tele has tie-ups with In-House Production Ltd and Indiainfo.com for creation of web ads for its portals. It also has links with leading television channels and intermediaries in the business. The company has a full fledged integrated studio in the Padmalaya Complex at Hyderabad and over 200 Telugu films in its library.

Post-offer, the promoters will hold a 69 per cent stake in the company's enhanced equity base of Rs 8.8 crore. Currently, the promoters hold 92 per cent in the company. The Padmalaya Tele shares will be listed on the stock exchanges at Hyderabad, Mumbai and the National Stock Exchange.