The company is planning to float fresh equity shares of as high as 1.4 crore. The equity capital will see a sharp jump from Rs 8.13 crore to Rs 22.13 crore. But one fails to understand why the company need such a huge equity. The fact is that even well-established and big media companies cannot boast of such a huge equity base. Now, the million dollar question is can the company be able to service such a huge equity base.

For an infant like Visual Vista in the media industry, it will be an Herculean task to do so. Especially when the company is yet to establish its presence in the television software producing field.

Promoted by G C Srivastava and his wife Madhuri Srivastava, Visual Vistas was incorporated as Srichand Fabrics (P) Ltd in 1987 with the business objective of manufacturing textiles. The company had changed its line of activity and rechristened itself to Srichand Engineering Company (P) in 1989.

In April 1994, the company had again changed its name to Mouli Textiles due to a change in the management. In the same year, the company had once again changed its name to Prudential Mouli Textiles (P) due to a change in management. In November 1999, the company had again changed its name to Visual Vistas (P) Ltd with a diversification into the creation of television software.

The equity shares with a face value of Rs 10 are offerd at par. Of the Rs 14-crore public issue, as many as 80 lakh shares are reserved for Indian public. The company has reserved 20 lakh shares to mutual funds, 20 lakh shares banks and 20 lakh shares to FIIs/NRIs/OCBs.

Interestingly, although the offer price is Rs 10, the company is demanding the amount in very easy installments.

On application, an investor has to pay only Rs 2.5, on allotment Rs 2.5 and the balance of Rs 5 on first and final call. An investor who is applying for 200 shares (the minimum application), has to pay only Rs 500 as application money.

The company is going public for setting up animation and multimedia centers in Bangalore and Hyderabad respectively. The company has estimated the project cost at Rs 22.13 crore which has not been apprised by any bank or financial institution. Nevertheless, almost the entire project is being financed through the equity route.

Of the project cost, Rs 10.81 crore is going towards plant and machinery, Rs 1.37 crore for miscellaneous fixed assets, Rs 1 crore for setting up an overseas office and Rs 63 lalk in multi-media products. Around Rs 3.97 crore is earmarked for working capital requirements.

The company is yet to recruit senior executives for the proposed project. Visual Vistas is currently operating from the leased premises and the lease agreement is not registered. In fact, the lease agreement is only for a period of 11 months.

The company, which is registered with STPI, has acquired tele serial film rights from Deepa Mouli Arts to telecast the teleserial films on TV channels and Internet CD.

The IPO is lead managed by Aryaman Financial Services and the shares are proposed to be listed at the stock exchanges of Hyderabad, Mumbai and Bangalore.