Mid-Day IPO gets huge response

Mid-Day IPO gets huge response
ENS ECONOMIC BUREAU

MUMBAI, FEB 15: Media firm, Mid-Day Multimedia Ltd's Initial Public Offer (IPO) has received enormous response from the investors with the issue being oversubscribed to the tune of over 13 lakh shares as on Thursday evening. The issue, launched through the book-building route, however, closes on Friday evening.

Bids for almost 76 lakh shares have already been received as compared to 63 lakh shares on offer, said the NSE website.

At the same time, in order to avoid controversy over Foreign Institutional Investor (FII) investment in the print media, Mid-day merchant banker, IL&FS Managing Director, Satish Shenoy said: "In light of the present controversy being raised by a section of the press we have already undertaken to Sebi that we will not accept bids not allocate any shares to the FIIs in the public issue until this matter has been clarified."

A Mid-Day statement, later, said "the company will abide by the law of the land and by the advice given by our merchant bankers in this regard."

It may be recalled that a section of the media and a lone Shiv Sena Member of Parliament had attacked the issue saying that Mid-Day's IPO has contravened Indian government laws which bans foreign investment in print media. This was despite the Reserve Bank of India (RBI) giving its permission to the issue to allot upto 24 per cent of its shares to the FIIs.

Mid-Day Multimedia, publisher of Mumbai's leading's eveninger, is raising 90 per cent of the issue amount (Rs 45 crore) through the book-building route. The balance amount of Rs 5 crore will be mobilised at a fixed price, which will open for subscription on March 3. The company's shares will be listed on the two premier exchanges, Mumbai and NSE.

Promoted by the Ansaris, Mid-Day is embarking on a Rs 65.77-crore project to expand its publishing and outdoor business and setting up e-enabling and support services. Under the publishing business, the company is investing Rs 16 crore in expansion of existing infrastructure, Rs 3 crore in expansion of readership of existing newspapers and Rs 4 crore in the Marathi edition of Mid-Day. The company has earmarked Rs 6.2 crore for developing and expanding `chalomumbai.com', a portal catering exclusively to Mumbai.

The company also plans to set up call centre facilities at a total cost of Rs one crore and invest Rs 3 crore in GIS mapping services. Of the issue proceeds, Rs 10.5 crore is going towards long-term working capital requirements. Promoters are pumping in Rs 11.82 crore as interest free loan which will be paid out of the issue proceeds. Besides the promoters' contribution and public issue proceeds of Rs 50 crore, the project is being financed through a term loan of Rs 2.5 crore from Bank of Baroda and internal accruals of Rs 1.45 crore.