Ram Kaashyap Investment to issue rights shares

Ram Kaashyap Investment Ltd (RKIL), a Chennai-based film distribution company, plans to raise Rs 35 crore through a rights issue of 3.5 crore equity shares of Rs 10 each to part fund its new business initiatives.

The company plans to foray into media and entertainment business, with main focus on content distribution to the overseas markets.

The company's board has already approved the letter of offer for the rights issue to the existing equity shareholders on rights basis in the ratio of four equity shares for every one equity share held. It currently possesses satellite rights for 475 popular movies. It has recently acquired a huge inventory of 800 more well known films.

The company aims to become one of the top three overseas distributors of Indian regional visual content over analogue and digital platforms.

“Internationally, there is a huge demand for regional language entertainment, particularly Tamil, Telugu, Malayalam, Punjabi and Gujarati, and these avenues remain underserved. It is this market that RKIL is well-positioned to tap the potential,” said Murali Raman, Head, Overseas Content Rights and Finance.

The overseas theatrical market for Tamil film can range from as low as Rs 15 lakhs for a low budget film to as high as Rs 20 crore for a blockbuster. Typically, around 20 percent of a film's budget is realised through overseas rights.

The company aims to become one of the top three overseas distributors of Indian regional visual content over analogue and digital platforms. RKIL  has existing arrangements with over 35 leading re-distributors worldwide for its theatrical and television content businesses.

The entertainment industry is one of the fastest growing sectors in the Indian economy today. t is reported a CAGR of 17.7 per cent growth in the sector in the last three years and estimated revenues to touch Rs 168 billion by 2013.

Domestically, of the 1,300-odd movies produced every year, the South Indian cinema industry, comprising Telugu, Tamil, Kannada and Malayalam films, accounts for 65 per cent. The Southern industry is estimated at over Rs 1500 crore and has done better than bollywood this year.

In  the FY 2009, both Telugu and Tamil segments registered a revenue of around Rs 770 crore each while the Malayalam and Kannada films contributed Rs 100 crore and Rs 50 crore, respectively.

In the second quarter ended September 30, 2010, the company reported a total income of Rs 2.31 crore as against Rs 24.99 lakhs in the corresponding period in the previous year. The net profit has improved to Rs 35.36 lakhs from Rs 22.23 lakhs in the period under reference.