Ltd, the company that publishes the Hindi daily, 'Dainik Jagran', has filed a draft red herring prospectus with the Securities and Exchange Board of India (SEBI).
The company proposes a public issue of 10,039,020 equity shares for Rs 10 per share. The company will also have a greenshoe option of up to 1,505,853 equity shares to be offered by Mahendra Mohan Gupta, one of the company's promoters.
From the IPO proceeds, the company plans to use Rs 137.16 crore for capital expenditure. This includes capital expenditure to consolidate its infrastructure such as printing facilities and the editorial, marketing and administrative departments in and around New Delhi.
The company plans to use Rs 80 crore for acquisitions and investments. As per the SEBI website, the company is already in the preliminary stages of negotiations and discussions for such strategic acquisitions and investments.
Jagran Prakashan also plans to launch a second newspaper brand in markets where 'Dainik Jagran' is a strong number one. The company hopes that this will help increase its market share.
The company is looking forward to acquiring and investing in other newspapers, magazines, journals and media related companies in India to expand its business and improve its competitive position.
Jagran Prakashan plans to use another Rs 40 crore on expansion of its outdoor advertising business. Out of this, Rs 30 crore will be utilised in the acquisition of 250 vehicles for mobile hoardings. These vehicles cost around Rs 12 lakh each. The remaining Rs 10 crore will be used for incidental expenses and higher working capital needs in the form of receivables since payments are usually made only after completion of the contract period.
The company will also use Rs 40 crore on the augmentation of working capital.
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