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Hindustan Times files for IPO


28 April, 2005: Hindustan Times expects losses in the first few years of its operations in Mumbai. This is part of HT Media's red herring prospectus submitted to capital markets regulator Sebi. The North-based Hindustan Times is expected to launch its Mumbai edition in mid-2005. The book running lead manager to the issue is Kotak Mahindra Capital Company. 

HT Media, owners of Hindustan Times newspaper is going for an IPO. HT Media has filed the draft red herring prospectus with the Securities and Exchange Board of India (Sebi). The IPO will be through the 100% book-built route. 

HT Media proposes a public issue of 46,40,000 equity shares of Rs 10 each and an offer for sale of 23,55,000 equity shares of Rs 10 each from HPC (Mauritius) Ltd. The HT Media IPO will also have a greenshoe option of 6,96,000 shares by the promoters, Hindustan Times Ltd. The value of IPO is still unclear. 

Business Standard has reported that the issue may raise around Rs 245-Rs 270 crore. The issue will constitute 15.08 per cent of the fully diluted post-issue capital of the company, if the greenshoe option is not exercised, and 16.33 per cent, assuming it is exercised, says the Hindustan Times IPO draft prospectus.

From the IPO proceeds, HT Media proposes to use Rs 76.40 crore for capital expenditure, Rs 76 crore for sales and marketing and Rs 10 crore for its radio services. HT Media recently signed a memorandum of understanding with Virgin Radio (Asia) Ltd for its Indian FM radio business.

Promoters hold 77.11% of the pre-issue equity share capital in HT Media, while Henderson has a 15.83% stake and Citicorp holds 7.06% of the pre-issue share capital. HT Media is a KK Birla group company. In October 2004, Citicorp had acquired a 8.27 per cent stake in the company for Rs 69 crore.

Hindustan Times is gearing up for its Mumbai edition. read our earlier story HT coming to Mumbai here. ( 

According to the Hindustan Times IPO draft, HT is expected to invest Rs 50 crore in capital expenditure at the time of the launch of the Mumbai edition, of which Rs 12.60 crore had already been invested by March 31, 2005. 

The draft says that The Hindustan Times during the period ended 31 December, 2004, derived about 79 per cent of its revenues from advertisements, of which the top 10 advertisers contributed about 8 per cent of the total revenue. About 20 per cent came from circulation revenue.


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