KARACHI, June 25: Eye Television Network Limited, that has launched HUM TV as its Satellite TV channel, is all set to make its Initial Public Offering (IPO) on Monday and Tuesday (June 27-28). The event is significant in the sense that the company is the first media (electronic or newspaper) to seek listing at the stock exchanges.
Compared to that, there are about 50 media houses in India that have offered shares to the Indian Public. Zee Telefilms; TV 18; Adlabs Films and Balaji Films being some of the big names in the field. A few of them are extremely big success stories. In 2004 the share price of Zee TV shares of the par value of Indian Re1 touched as high Rs174.
But back to the country, Eye Television Network Limited has launched HUM TV with a total paid-up capital of Rs500 million, out of which Rs270 million has been invested by the sponsors and Rs80 million are generated through private placements. The balance of Rs150 million will be floated through the IPO to the public at Rs10 per share. Minimum subscription would be for 500 shares per applicant.
Principal sponsor directors and their contributions include: Mr Shunaid Qureishi Rs65 million; Jahangir Sidddiqui & Co. Limited Rs63 million; Mr M Ayub Rs40 million Mr Duraid Qureshi (chief executive) Rs35 million; Muhammad Hanif Rs20 million; Mr Abdul Ghani Rs12.5 million and Ms Sultana Siddiqui (chairperson) Rs10 million.
Private placements have been made by: Trustees of the Crosby Dragon Fund Rs30 million; Aqeel Karim Dhedhi Securities (Pvt) Limited Rs20 million; EFU General Insurance Company Limited Rs15 million; Jahangir Siddiqui Securities Services Limited Rs10 million and First Dawood Investment Bank Rs5 million.
The public issue of Rs150 million worth of shares have been underwritten by 10 companies including, First Dawood Investment Bank; KASB Bank; Network Leasing Corporation; Atlas Investment Bank; WE Financial Services; Dawood Capital Management and others.
The company launched its formal operations on January 17, 2005. The sponsors admit that although the company is new, it is backed by celebrities like Sultana Siddiqui, Khush Bakhat Shujat and Mehtab Akbar Rashdi who boast a total of 100 years of show biz experience.
One of the risk factors mentioned by the company in its abridged prospectus published in newspapers on June 20 is “competition”. It is stated the Pakistan Electronic Media Regulatory Authority (PEMRA) has recently awarded 14 licences to different companies to launch satellite channels out of which nine companies have made their debut by launching their channels, which would intensify competitions. But Eye TV contends that it can ride out the challenge due to its low cost structure primarily because of its own up-linking facilities.
Some of the media moguls would be watching with interest the public response to the company’s IPO. There ought to be some concern about the timing of the IPO, coming just on the heels of a catastrophic UBL issue and in an overall sluggish market. That surely is an unchartered territory. But if the company is able to raise the required sum from the IPO, other media ventures would be tempted to enter the capital market, opening up a refreshingly new sector on the Karachi Stock Exchange.
