Crayons Advertising MD Kunal Lalani on why the agency is going public

When news breaks that a company is going public, most assume it is another start-up. Not this time. Crayons Advertising, a 36-year-old agency announced the filing of its Draft Red Herring Prospectus (DRHP) with NSE Emerge for its initial public offering.

NSE Emerge, founded in 2012, is the National Stock Exchange’s new initiative for small and medium-sized enterprises and startup companies from India.

“The Covid period helped us review and revise our thoughts on how to grow businesses,” says Kunal Lalani, managing director, The Crayons Network. It, under its belt, has media agency Omni Brands, All White OOH, and COEUS Communications.

The impetus for this move was the rapid transformation and use of digital. “It brought about a lot of thoughts on how do you grow, how do you take the company forward,” he tells us. GroupM's TYNY report said digital will take 56% of the 2023's ad share .

“Last year (financials) was good and this year is better than last year so we thought now is the time, let's go for it,” remarks Lalani.

In its DRHP, the agency has revealed its total revenue for the year ended March 31, 2022, stood at Rs 19,404.97 lakh and its net profit after tax was Rs 161.34 lakh.  

One could assume an advertising agency could have saved office rent costs by say initiating work from home to fuel its expansion needs but the managing director was against such an idea.

“Working from home is not possible in the creative world because it requires a lot of brainstorming, sitting together, big ideas... it's never by people working individually, sometimes even the simplest of ideas comes from the junior most guys, you all need to be interacting with each other,” he states.

The agency plans to offer 64.30 lakh equity shares with a face value of Rs 10 each.

It has offices in Mumbai, Delhi, Chennai, and Lucknow and has no plans as of now to expand into other cities but intends to go deeper into the regions where it operates.

Crayons Advertising will, however, use the proceeds from the IPO to invest in technology, “get proprietary software tools”, and not depend on others for 3D studios or animation work but get it all in-house.