Adlabs plans to repay Rs 330 crore debt through public offering

Plans to set up two more theme parks, in Hyderabad and Delhi, over the next 4-5 years

Manmohan Shetty-promoted Adlabs Entertainment Ltd, the firm behind theme park Adlabs Imagica located at Khopoli between Mumbai and Pune, is entering the capital market on March 10, through an initial public issue of 2.03 crore equity shares of face value Rs 10 each, to raise funds mainly to repay part of its debt. The company is also looking at setting up theme parks in Hyderabad and around Delhi in the coming years.

It is also working with the Gujarat government to develop tourism projects in the state. However, nothing has been firmed up as of now.

The price band has been fixed at Rs 221-230 per equity share, and the issue comprises a fresh issue of 1.83 crore shares and offer for sale of 20 lakh shares by Thrill Park Ltd. Retail investors have been offered a discount of Rs.12 per share.

The issue will close on March 12, 2015. Imagica opened since April 2013, is a part of Adlabs Mumbai which also includes water park Aquamagica and a hotel which will open this year.

Speaking at the press briefing here in Ahmedabad, Manmohan Shetty, chairman of Adlabs Entertainment Ltd said, "We are looking to set up two more theme parks over the next four to five years. One of these would come up at Hyderabad for an approximate investment of around Rs 550 crore, and another one could come up near Delhi." For the Hyderabad park, the land would be from local developers while Adlabs would be developing the theme park.

Coming back to the 132 acre Khopoli Park, which started in April 2013,  it has been visited by over 1.5 million people so far. It can handle about 15,000 people per day, and the company opened a new theme park Aquamagica nearby Adlabs Imagica in October last year. A 287-room hotel under the Novotel brand is coming up near the site, and the first phase (of 116 rooms) is expected to get operational by April this year.

As Kapil Bagla, director and CEO of Adlabs Entertainment said, with the hotel coming up, the park's catchment area is expected to rise further, with people opting to visit the theme park over long weekends. Already around 20-22 per cent of footfalls are from Gujarat.

The company has a debt of around Rs 1100 crore on its books, and through the funds raised from the public offering, it plans to repay around Rs 330 crore of the debt, thus bringing down the interest costs by about 30 per cent. Bagla said that nearly 75 per cent of the proceeds would go towards repaying debt. The Imagica Theme park has come up with an investment of around Rs 1,650 crore, of which Rs 550 crore is equity from promoters and private equity players, and the remaining is debt funded by a consortium of 13 banks.

The company is also looking to monetise the additional 170 acre land available with the company at the site. As Pooja Shetty Deora, advisor to Adlabs Entertainment mentioned, talks are on with several developers and investors to decide future projects at the site. A senior company official informed that the book value of the land is around Rs 70-75 lakh per acre.

The amusement park industry, slated to be a $32 billion industry worldwide, is still in its nascent stages in India. It is pegged around Rs 2,500 crore at the moment, and is expected to touch Rs 4,000 crore in three years.