Big B: He wants your money

The run-up in the Indian stock markets has lasted a while now and there has been a slew of companies from across industries that has gone public during the period. Sectors like aviation and wind energy are just two that hit the markets for the first time. From the entertainment sector, those in the exhibition side of the business like Shringar, PVR and Inox, have been some of the companies that have gone public. However, the entertainment majors from Bollywood, which include film production outfits and distribution houses, have been conspicuous by their absence.

Not any more. Some prominent names are looking to hit the markets over the next few months. The first off the blocks will be Ram Gopal Varma's company, The Factory, which has already initiated the process. The company has almost perfected the "studio model" where directors can make their films under the banner of The Factory. Besides, it has entered into arrangements with players like Adlabs where a certain number of films will be made over time. "We will be filing the prospectus with Sebi over the next 60-90 days and will hit the markets after that. We are looking at an IPO with a size of Rs 100 crore," says The Factory's official spokesperson. The expected timeline for The Factory's IPO: August.

Ever since the film industry was given "industry status" in 2000, nothing much of consequence has taken place barring banks lending very small sums to producers and companies going in for IPOs. To most people in the industry, an IPO means increased levels of transparency. "It is a huge commitment to the shareholders and that is something that needs to be understood," says producer and head of Puja Entertainment, Vashu Bhagnani. For him, an IPO is definitely on the radar though he is quick to add that he would much rather do it late this year or early next year when he is fully ready. "We will need the funds to produce more films and for setting up a new studio. We are looking to produce about three films each year," states Bhagnani. The buzz is that he will raise about Rs 300 crore.

This is not the first instance of companies in Bollywood going public. During the first boom in the markets between 2000 and 2001, players like Mukta Arts, Creative Eye, Cine Vista were some of the companies that took the IPO route. One player whose name constantly comes up is that of AB Corp and the company's head honcho Amitabh Bachchan has always spoken of plans to go public. The buzz is that discussions have been in progress with bankers and something could be firmed up in a few months. Though there are no numbers officially, the grapevine indicates it will be upwards of Rs 200 crore.

Merchant bankers explain that the intention of the companies to go public is only side of the story. "The real issue is that of execution and bringing about a degree of professionalism. Here, only a few companies can manage to pull it off," says a banker. There is no doubt that companies will need cash to scale up operations and as B.R. Films' Business Director, Sanjay Bhutiani, points out, the funds could come handy for various reasons. "We are looking at making more films, having a stronger presence in TV and expanding our distribution network. We also need to make investments in areas like post-production," he says. An IPO is one of the options being considered by B.R. Films, though Bhutiani is tight-lipped. Market sources say it will be at least Rs 100 crore. Now here's hoping that investors queue up with just as much enthusiasm as viewers do.