Adlabs IMAX project postponed; share at discount

Riding on the ICE wave, AFL made an IPO of 44 lakh equity shares at a whopping price of Rs 120 in December 2000. It plans to build an IMAX theatre in Mumbai which will house India’s first and the world’s largest IMAX domealong with a four-screen multiplex and other entertainment facilities. While the IMAX theatre is now expected to be operational by March 2001, the multiplex will be operational by April 2001.

Since the arrest of Bharat Shah, the big-time film financier, and the consequent negative sentiments for film and media-related stocks, the scrip did not fare well on listing. It got listed at Rs 122 on 8 Jan 2001. It touched a low of Rs 82 and is currently traded around Rs 93.

AFL’s main business is processing of pictures. It has a picture-processing laboratory and processes documentaries, short films and Hindi feature films. The company caters to the western India market and has a marketshare in excess of 70% for 35-mm colour negative film processing and a marketshare of almost 60% for 35-mm colour print processing in that region.

The company has an order book position of 26 big-budget films. Also, to increase the business, the company plans to process regional language films. It expects a good potential for music videos in the coming years. The company is focussing on addition of new customers every year.

While the company has a steady source of revenue from the processing of films, the novelty of the IMAX theatre was the key to investor interest inthe scrip. However, the project has been delayed.

Several other media companies like Cinevista are quoting at a discount to their offer prices. "These companies charged very high premium from investors," said an investor.