The company could even end up with a total collection figure of over Rs 87 crore, added the source. This shows that the investors have committed for a sum of over Rs 175 crore (including allotment money).

The current bull run, which started on May 25, has come as a blessing in disguise for Padmalaya. The IPO opened when the Sensex scaled a peak of 4433 and the index continued its rally when the issue was open for subscription.Nevertheless, the IPO was reasonably priced at Rs 100 compared to Cinevista Communication which had offered shares at a price of Rs 300.

Padmalaya offered equity shares at a price-earning multiple of 15.55 compared with Cinevista's bookbuilding IPO at a PE of 105. The response has been overwhelming as both retail and institutional investors have applied for a large chunk of shares, according to the market source. Lead managed by Karvy Investor Services, the IPO opened on May 31 and closed on June 6. The company had demanded Rs 50 on application and the balance of Rs 50 on allotment. The entire issue was underwritten.

The shares are proposed to be listed at Hyderabad (regional) and Mumbai. Reliance Capital holds 22.73 lakh shares of Padmalaya (on a pre-issue equity base of 75 lakh shares). Mutual funds like Kothari Pioneer Prima Fund and Reliance Vision Fund are holding 2.5 lakh shares each of Padmalaya. Their post-issue stake is 5 per cent.

Padmalaya, a dominant content provider in Andhra Pradesh, is now embarking on a Rs 54.25-crore project. The company is expanding business avenues by setting up new joint ventures, studios, expanding the marketing network and procuring films for its library. The state-of-the-art TV studio will be used for in-house productions as well as by third parties. The company will commence production of several mega serials for national channels and also for international markets. The company also plans to upgrade production facilities to the digital Betacam format and improved post production systems.

The company has an alliance with Penta Media Graphics for technical support in establishing 2D/3D animation lab, studio equipment and design shop. Also, Padmalaya has joined hands with Indiainfo.com for creation of WEB advertisement for its portals and M/s In-House Production Ltd for marketing television software. The company plans to acquire rights for more Telugu and Hindi films.

The company aims to increase its air time on a substantial scale. Padmalaya is investing Rs 17.75 crore in enhancing production facilities for higher volume of television software production, 2D/3D animation, web advertisements and films trailors. Besides, Rs 3 crore will be invested in the tieup with Pentamedia, Rs 4.5 crore for the integrated television software studio, Rs 2 crore for expansion of marketing network and Rs 5 crore for procurement of films for library. Of the issue proceeds, a sizeable portion of Rs 19.8 crore is earmarked for working capital requirements.

Padmalaya has over 200 Telugu films in its library and has a full-fledged integrated studio in Hyderabad. The company has 1000 hrs of software for various channels. The producer of Hindi mega serials like Jai Veer Hanuman and Budha, Padmalaya has a sizeable presence of TV programmes on DD-8 channel in Telugu.

For the 18-month period ended March 31, 2001, the company is projecting a net profit of Rs 25.67 crore on turnover of Rs 70.29 crore. The projection of a sharp jump in turnover is based on projected revenue from various orders on hand and serials expected to be commissioned as per the company's business plan.

For fiscal 1999, Padmalaya has earned a net profit of Rs 3.63 crore on turnover of Rs 17.82 crore. This gives a net profit margin of 20.37 per cent for Padmalaya. According to unaudited results for fiscal 2000, Padmalaya is operating on a net profit margin of 33 per cent.