RPG Enterprises has shelved its plan to raise funds by through private placement of shares of Music World, the group's Rs 6400 crore retail chain of music cassettes and compact discs.
Confirming the development, top sources in the diversified group said tepid response from proposed takers forced the group to shelve the offer. "The financial institutions, which were interested to pick up a pie of Music World's total equity, intended to subscribe the proposed offer at a price far below from the group's expectation," he said.
The group, which aimed at mopping up nearly Rs 25 crore through the offer, had appointed merchant banker, J M Morgan Stanley, to find out takers for the proposed private placement.
It was decided that around 20 per cent stake of Music World would be offered through the offer.
The proceeds of the offer was decided to fund the expansion of Music World's operations. Music World has stores in Kolkata, Bangalore, Chennai, Kochi, Hyderabad, Delhi and Chandigarh.
Music World has arrangements with numerous small and big music companies including top levels such as Sony, Universal, BMG, Tips and T-Series.
Last year, the group managed to collect Rs 125 crore through private placement of shares of Saregama India (formerly Gramophone Company of India). Nearly 7 lakh shares were placed with institutions at Rs 1,785 each.