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Balaji Telefilms to consider fundraising on 20 July, shares gain 4.43%

MUMBAI: The board of Balaji Telefilms will meet on 20 July to consider various fund-raising options. This will include raising funds through issue of securities on preferential basis.

Balaji Telefilms has already appointed Axis Capital as banker to scout for investors for its over-the-top (OTT) service ALTBalaji.

In late May, the TV production house said that several financial and strategic investors had expressed interest in tying up with ALTBalaji. The management is actively considering the options available and has appointed Axis Capital as bankers for the investments.

In February 2016, the company had raised Rs 150 crore (Rs 1.5 billion) through allotment of 1,07,20,000 equity shares at Rs 140 each on preferential basis to Atyant Capital India Fund – I, Vanderbilt University, GH, GHI LTP, GHI HSP and GHI ERP for launching ALT Balaji. The company had diluted 14.1% equity in that transaction. Axis Capital had mediated the deal.

Balaji is planning to invest up to Rs 400 crore in ALT Balaji and is eyeing break-even in 3.5 years. ALT Balaji hopes to become profitable when it attains four million paid subscribers in India and abroad.

ALT Balaji, which will offer 250+ hours of original content, has four key content areas—original shows, movies, kids and comedy. The OTT platform is expected to consume an annual expenditure of Rs 120 crore for the next three years with 80% of this expenditure going into content production.

Shares of Balaji Telefilms gained 4.43% on Tuesday to close at Rs 183.90 on the BSE, mainly due to the news about the company’s fundraising activity.

On 15 July, Sameer Nair stepped down as Balaji Telefilms Group CEO and returned to an advisory role. On the day Balaji Telefilms announced the exit of Nair as Group CEO, shares of the company, which had risen to a 52-week high of Rs 177 on 11 July 2017, fell 7.26% to close at Rs 158.95 on the BSE.

The company has a market capitalisation of Rs 1,396.36 crore, as of 18 July. Promoter’s holding has increased from 40.92% in June 2016 to 42.22% until 31 March 2017.