The shares of this debt free company which is India’s oldest music label was up by 4 percent after the company made an announcement regarding a strategic acquisition.
At the day’s closing the shares of Saregama India were trading at Rs 368.20 which was up by 4.41 percent from its previous day close price and the market capitalisation of the company is 7,099.25.
According to the company’s filing on BSE, Saregama to acquire 92.61 percent stake consisting of 6,86,624 shares in Pocket Aces Pictures Private Limited by way of secondary acquisition, in one or more tranches.
In the first tranche it is going to acquire 51.82 percent in the company for a consideration of 174 Cr and invest an amount of 15 Cr by way of primary subscription for additional 25,974 shares of Pocket Aces and consideration for the second tranche basis to be determined the enterprise value being the higher of (a) the adjusted equity value for the first tranche or (b) enterprise value determined basis revenue multiples of Pocket Aces, subject to agreed adjustments.
Altogether the total stake to be held by Saregama in Pocket Aces Pictures Private Limited is 92.61 percent consisting of 6,86,624 shares.
First tranche of the acquisition is expected to be completed within 2 months from the execution date, The subscription of additional equity shares is expected to be completed within 2 months from the completion of acquisition of first tranche and Second / subsequent tranches of the acquisition is expected to be completed within 18 months from the completion of acquisition of the first tranche.
The company’s revenue has increased by 27.84 percent from 576.2 Cr in FY22 to 736.62 Cr in FY23, accompanied by increasing profits of 164.4 Cr to 185.05 Cr.
The company has reported a return on equity (ROE) of 14.84 percent and return on capital employed of 20.32 percent. Even Though the company is generating good returns on its capital employed it is only able to generate decent returns on its equity and the company’s profitability ratios have been decreasing year on year.
According to the latest shareholding data available for the June 2023 quarter, the company’s Promoters hold 58.83 percent stake, the Domestic Institutional Investors hold 2.28 percent and the Foreign Institutional Investors (FII) hold 17.79 percent.
Saregama is India’s oldest music label, youngest film studio and a multi-language TV content producer which is owned by the famous Indian multinational conglomerate RP-Sanjiv Goenka Group.
Written by: Bharath K.S
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