Hindustan Times fixes Rs 445-530 price band for IPO

Hindustan Times, Delhi's leading newspaper, has fixed a price band of Rs 445-530 for its maiden public issue, which will be launched by August-end.

The company behind the newspaper, 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 will be decided through a book-building process.

From the IPO proceeds, HT Media proposes to use Rs 76.48 crore for capital expenditure, Rs 76 crore for sales and marketing (Rs 53 crore and Rs 23 crore in Fiscal 2006 and 2007, respectively) and Rs 10 crore for its radio services. HT Media signed a memorandum of understanding with Virgin Radio (Asia) Ltd for its Indian FM radio business in December 2004.

The Mumbai edition of Hindustan Times, says HT Media's draft prospectus, will see a capital expenditure amounting to Rs 50 crore, including Rs 12.6 crore as expenses incurred up to March 31, 2005.

For the Mumbai edition, details of consolidated capital expenditure (already incurred up to fiscal 2005 and anticipated in fiscal 2006) are as follows: Land (Rs 5.3 crore),

Machines including stackers, registration system, CTP (Rs 17.06 crore), Press building (Rs 16.6 crore), office renovation (Rs 2.5 crore), infrastructure for IT (Rs 7.5 crore), and contingency for capital expenditure (Rs 1 crore).

For the Greater Noida printing operations, operationalised in March 2005, HT Media has already incurred a capital expenditure of Rs 212.9 crore. The project requires an additional investment of Rs 15 crore. Future investments will be mainly in the plant and machinery, and the Press building.

Promoters hold 77.11% of the pre-issue equity share capital in HT Media, while Henderson, according to media reports, has a 15.83% stake (company sources said Henderson has a 17% stake), while Citicorp holds 7.06% of the pre-issue share capital. HT Media is a KK Birla group company.

While Citicorp has not offered its share for an public offering, Henderson is willing to dilute up to five per cent stake.

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