MUMBAI: A rough climate to raise capital is forcing media companies to change their plans. IndusInd Media and Communications Ltd, the media subsidiary company of Hinduja Ventures Ltd, is toying with the idea of a reverse merger that would enable it to list and raise funds up to Rs 5 billion through qualified institutional placement (QIP).
The company, which operates its cable TV business under the Incablenet brand, was in talks with investors to raise capital ahead of an initial public offering (IPO) but a sudden slump in global economies seems to have hurt this plan.
"IMCL is considering a reverse listing. This will help in raising capital through QIP," a source familiar with the development said.
IMCL managing director and chief executive officer Ravi Mansukhani could not be contacted for his comments.
Indiantelevision.com had earlier reported that IMCL was planning to raise $100 million, a major chunk of which would be used to fund acquisitions.
IMCL acquired five cable TV networks in Maharashtra last year which helped up its subscription revenue in the first quarter of this fiscal. Total income for the quarter climbed 37 per cent to Rs 1.12 billion, up from Rs 821.2 million a year ago.
"The rise in revenue is mainly due to growth in subscription revenue. The acquisitions in Maharashtra last year are showing signs of maturity," the source said.
Carriage revenue from broadcasters has grown slowly at 10 per cent but still accounts for 63 per cent of the multi-system operator‘s total income. "Carriage income didn‘t go up as was expected but the next quarters should be stronger," the source said.
IMCL has almost doubled its net profit to Rs 191.3 million for the three months ended June 2011, up from 100.7 million in the prior year quarter.
Ebidta jumped 90 per cent to Rs 396 million from Rs 208 million in the earlier year.
IMCL has a subscriber base of 8.5 million across 31 major cities. It has deployed 400,000 digital set-top boxes. The MSO has a backbone of over 10,000 km of hybrid fibre optic network.
