MIC Electronics to invest Rs 44cr for video screens

Hyderabad-headquartered MIC Electronics Limited, manufacturer of LED screens and lighting equipment, is betting big on rentals from its large video screens. The company, which is seeing a business opportunity in the ensuing elections and other events, is investing about $10 million (Rs 44 crore) for adding 50 big screens.

Speaking to Business Standard, MIC chief executive officer and managing director MV Ramana Rao said the company was expecting revenues in the order of Rs 3 crore a month by way of rents from large screens in two years. At present, it gets about Rs 70 lakh a month from the 25 screens it now has.

The company recently set up a large screen at Barcelona Sports Club at Ecuador under a joint venture with the Sports LED Media. This is first of the part of the $50 million order that the JV has got to set up 50 screens in as many stadia. It will set up two more screens this quarter and the number will increase to 30 by June next year. The order is expected to be completed by December 2009.

The JV entitles MIC to a share in revenues in the media and TV rights, sponsorships, display ads and others at these stadia for seven to ten years depending on the agreement. MIC, which is the supplier of the screens, will also get the sale revenues. “We are expecting $400,000 per year from each stadium after 2010,” said Rao.

The company is also looking to tap the billboard and pathway display business, particularly in the US. “LED billboards are a big business as they reduce the power costs,” Rao said. It is targeting to earn $20 million (about Rs 88 crore) next year from the LED billboard segment.

It recently got a Rs 8-crore order from the railways for full-colour passenger details display systems at 100 A Class stations and is processing an order from the GMR Group for its Karnataka and Andhra operations. The group is expecting to earn a net profit of Rs 100 crore on a turnover of Rs 450 crore this financial year as against Rs 360 crore last year. It recently raised Rs $20 million (about Rs 80 crore) through an IPO.