Indian film firms going alternative

Bollywood producer latest to raise cash via AIM IPO

Indian entertainment companies continue to flock to the Alternative Investment Market of the London Stock Exchange.

Shares of Bollywood movie producer Indian Film Co. rose as much as 20% on Monday in their AIM debut, which raised $109 million. The initial public offering was priced at £1 ($1.98), but on its first day the stock rose as high as £1.20 ($2.38) before closing at £1.11 ($2.20).

Animation outsourcing company Compact Disc India late last week became the latest Indian media and entertainment firm to announce plans for a listing on AIM.

The company, headquartered in Chandigarh, 155 miles north of Delhi, said that it will list its newly incorporated company MediaOne Ventures Ltd. on AIM in an IPO targeting to raise $50 million. The listing date was not given, but it is expected to occur within the next few months.

Among its projects, CDI recently signed a $20.2 million deal with Los Angeles-based Motion Pixel Corp. to co-produce the animated feature "Goaaaaal," based on Brazilian soccer star Ronaldo and planned for release during the 2010 World Cup.

CDI also is prepping the live-action film "Guru of Sex," written by London-based screenwriter Farrukh Dhondy. CDI said Ben Kingsley is attached to the project, which is inspired by the life of Indian mystic Osho Rajneesh.

Both films, with a combined budget of $36 million, will be co-produced by MediaOne.

"It is our intent to position CDI as an international filmmaker, and an overseas listing will facilitate joint ventures, acquisitions and alliances in major international markets with global film companies," CDI chairman Suresh Kumar said.

Without giving details, Kumar added that CDI already has "close associations with media majors like Canyon Films, Pantheon Entertainment Corp., Hyde Park Films and Working Title Films."

London's AIM is increasingly becoming a preferred source for Indian entertainment companies to raise capital. Broadcast major TV18's film offshoot Indian Film Co. is one example.

Mumbai-based media major UTV Communications also is prepping its listing, set for within the next few weeks, hoping to raise $80 million.

Similarly, cinema chain Pyramid Saimira Theatres, based in the south Indian city of Chennai, also is reportedly considering to raise $150 million via an AIM listing next month for its production and distribution unit.

In July, London-based film major Eros Entertainment became one key sector player to list its shares in London, raising $44.5 million in its AIM IPO.

Overall, 11 Indian or India-focused companies have raised more than $2 billion on AIM in 2006. This year, more than 20 such companies are expected to raise $5 billion.
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