Devgan, Kajol take stock; seek Rs 2.5 cr from public

Earlier attempts by the Indian movie industry to corporatise the private companies have failed miserably with bankers and financial institutions keeping their distance from movie-makers. If successful, Devgan’s firm would be the first Indian movie house which would have a stock market listing for an industry which is plagued by underworld elements and lack of organised funds. “We are planning to launch an initial public offering of Rs 2.5 crore at par to fund our expansion plans,” Ajay Devgan, Vice Chairman of DESL announced here today at a packed news conference. The company will file its prospectus with the market regulator, Securities and Exchange Board of India (Sebi) by April-end, he added.

The company has an authorised capital of Rs 10 crore, of which promoters, the Devgans, have contributed Rs 7.5 crore while the rest would be raised from the small investors. The money would be used to fund the gold rush of launching a dot com venture, making television software and for movie distribution, Devgan said.

The portal to be launched in the next 3-6 months would be an exhaustive encyclopedia on the Indian entertainment industry, and also function as a B2B portal for people interested in the movie industry providing list of actors, directors, locations, and technicians, DESL executive director (IT) M P Bansal said. The company, however, has no revenue model as of date for the portal which would require an investment of Rs 70 to 80 lakhs, he added.

On the television front, DESL has started production of Bangla teleserial `Mukhosh’, directed by Parto Ghosh, to be aired in April or May 2000 by ATN Bangla for five days a week.

The company has already acquired distribution rights for 12 films to be released in 2000, he added. DESL posted a net profit of Rs 1.68 crore on sales of Rs 7.37 crore for seven month period ended January 21, 2000, Bansal said. For the year ended March 31, 2000, the company expects a Rs 8.5 crore turnover and profits would be to the tune of Rs 1.7 crore, Bansal added.

When asked about the shadow of jinxed venture of super star, Amitabh Bachchan, AB Corp hitting the investor sentiments, Devgan emphasised the business plan of DESL would be different from AB Corp which has defaulted to the loans of many public sector banks. “We are into internet business and many other value addition businesses. The company is already into film distribution and production businesses which are making money,” said Bansal who fielded most of the questions from the media while the casually dressed Ajay and formal attired, Kajol provided the perfect photo-op to photo-journalists.

Though the company will not have any assets to back its future plans and depend heavily on the intellectual property, Devgans expect the debut issue to do well. Says Kajol: “Consistency has been our trade mark… please believe in us as we believe in ourselves.” Whether investors carry this belief in the high-risk venture is something to be seen come June.