Inspire Films IPO Review: Inspire Films Limited is coming up with its Initial Public Offering. The IPO will open for subscription on September 25, 2023, and close on September 27, 2023. 

This is an SME(Small and Medium-sized Enterprise) IPO and the company is going to be listed on the NSE SME platform.

In this article, we will look at Inspire Films IPO Review 2023 and analyze its strengths, weaknesses, financials and GMP. Keep reading to find out!

Inspire Films IPO Review – About The Company

Inspire Films Limited was incorporated in 2012 and is involved in the creation, production, distribution, and exhibition of television and digital content across a variety of broadcasting channels, apps, and digital platforms. Additionally, they are engaged in content writing, production and sales, as well as the acquisition of rights.

It is involved in every aspect of content creation, including project financing, hiring actors and crew, location scouting, set design, budget management, and overseeing production and post-production.

The company operates on a B2B Business Model, and currently operates in 3 different Business verticals:

• TV – Hindi GEC (General Entertainment Channels)
• Digital Content and platforms (OTT)
• Regional content

Throughout the year, the company has created more than 10,000 episodes of popular content, including 35 original productions, for top Indian broadcasters and OTT platforms such as Star Plus, Colors, Sony Entertainment Television, Disney+Hotstar, MX Player, Sony LIV, Jio Cinema, Voot Select, Channel V, Cartoon Network, Star Gold, Pogo, Disney Channel, Star Pravah, Tarang TV, Sun TV, Surya TV, and more.

Inspire Films IPO Review – Industry Overview

The Indian Media and Entertainment (M&E) industry is a growing sector that is making considerable progress for the economy. The industry has been significantly aided by the increasing availability of fast and affordable internet, rising incomes, and growing consumer purchases of durable goods.

According to a report by EY, the Media and Entertainment Industry in India is predicted to experience a Compound Annual Growth Rate (CAGR) of 10% and hit $35.4 billion by 2025. Additionally, advertising revenue in India is projected to reach $5.42 billion by 2024. 

Inspire Films IPO Review – Financial Highlights

If we look at the financials of Inspire Films Limited we find out that their assets have increased from ₹28.49 crores in March 2021 to ₹41.59 crores in March 2023. 

Their revenues have increased from ₹19.42 crores in March 2021 to ₹48.84 crores in March 2023. With the rise in its revenues, the company has managed to turn around from a loss of ₹0.8 crores and reported a net profit of ₹4.04 crores in FY23

In terms of return ratios, it has a ROE of 30.88% and a RoCE of 32.01% as of FY23. A high ROE and RoCE suggest a good return on the capital invested by the shareholders and an efficient use of the company resources.

The company’s debt-to-equity ratio of 0.64 suggests that the company majorly uses its own funds to run its business.

(Source: RHP of the company)

Peers of the Company

The company faces stiff competition from well-established players in the television and content streaming segments, which have ventured into this sector in the past few years.

Additionally, the competition has expanded beyond digital cinema to OTT platforms. The company faces intense competition from local and international players in this domain, with the focus being on acquiring content and exclusive deals with top-notch talent, including actors and directors. The following is the list of the company’s peers:

• Balaji Telefilms Limited
• Bodhi Tree Multimedia Limited
• VR Films & Studios Limited

Strengths of the Company

• The company’s team comprises experienced professionals who have several years of experience in the entertainment industry. With their experience, the company is focusing on continued expansion and strengthening of its Content Library.
• The company has a strong managerial team that ensures compatibility and reliability with the clients servicing its needs and requirements efficiently.
• The company has an established operation and a strong track record that has increased year-on-year in the past three years
• The company has built strong relationships with broadcasters and channels and also acquired content rights across various segments. This has allowed it to curate a diverse and comprehensive content library that caters to the varied tastes and preferences of its audience.

Weaknesses of the Company

• If the company is unable to produce content based on the tastes and preferences of the audience, it could result in costs exceeding revenues generated or anticipated profits.
• The company’s operations necessitate a significant amount of working capital. The inability to obtain such working capital can adversely affect the business
• The company operates in a highly competitive industry and faces intense competition from various players in the market. This increased competition may lead to a rise in the price of content and talent, which could limit the company’s access to high-quality resources.
• The company is dependent few of its customers for a significant portion of its business. The loss of any such customer can significantly impact its business.
• The company relies on its distributors,  Broadcasters, and TV Channels to display its shows. Any delay in payment from these entities can have a significant impact on its revenues and profitability.

Inspire Films IPO Review – GMP

The shares of Inspire Films traded at a premium of 50.85% in the grey market on September 21, 2023. The shares tarded at Rs 89. This gives it a premium of Rs 30 per share over the cap price of Rs 59. 

Inspire Films IPO Review – Key IPO Information

Promoter: Yash Arabinda Patnaik and Beyond Dreams Entertainment Private Limited

Book Running Lead Manager: Narnolia Financial Services Limited

Registrar to the Offer: Maashitla Securities Private Limited

The Objective of the Issue

The net proceeds from this issue will be utilized for the following purposes:

• Meeting the company’s working capital requirements
• General corporate purposes.
• To meet the Issue Expense

In Closing

In this article, we looked at the details of Inspire Films IPO Review 2023. We can conclude that with the rising incomes, increasing internet penetration and a growing push toward digital adoption, the industry is expected to grow further in the coming years and this company has a scope to benefit from it.

Inspire Films Limited is an SME(Small and Medium-sized Enterprise) IPO which is different from the mainline IPO as the investment required, and the Lot size of the share is larger. The minimum investment required and the Minimum/Maximum lot size for this IPO is ₹118,000 (2000 shares).

What do think the future holds for the company? Are you applying for the IPO? Let us know in the comments below.

Written By Aaron Vas

By utilizing the stock screener, stock heatmap, portfolio backtesting, and stock compare tool on the Trade Brains portal, investors gain access to comprehensive tools that enable them to identify the best stocks also get updated with stock market news, and make well-informed investment decisions.