This entertainment stock has zoomed 100% in 18 trading sessions

On April 6, the firm announced that credit rating agency, CARE Ratings has revised its ratings on the bank facilities of the company from CARE BBB to CARE BBB+ with stable outlook

Shares of Tips Industries (TIL) were locked in 5 per cent upper circuit at Rs 988.65, also its new high, on the BSE on Thursday.

The stock of one of India's largest entertainment company having presence (along with its subsidiaries) in music film production film distribution and artist management has zoomed 100 per cent in the past 18 trading days from the level of Rs 494.80, on April 23.  The company is engaged in the production and distribution of films and leveraging its audio content library digitally in India and overseas. The company is also a leading producer of Punjabi films in the country.

The counter has seen huge trading volumes with 100,000 equity shares changing hands on the BSE till 11:53 am, against an average sub 8,000 shares were traded daily in past two weeks, data shows. A combined around 150,000 equity shares changed hands on the NSE and BSE and there were pending buy order for about 7,000 shares on both the exchanges.

On May 10, 2021, TIL's board approved and announced demerger of TIL in two separate entity Tips Industries Limited and Tips Films Limited, to transfer films production business in separate entity, according to the management the demerger process is expected to take 8-9 months subject to necessary statutory and regulatory approvals. The same would result in stability of revenue and profitability of music segment company.

On April 6, the TIL announced that the credit rating agency, CARE Ratings has revised its ratings on the bank facilities of the company from CARE BBB to CARE BBB+ with stable outlook.

“The rating assigned to the bank facilities of TIL factors in improvement in capital structure and debt coverage indicators. The rating also factors in the stable & consistent revenue growth from music business, strong profitability and strong liquidity position of the company. The rating continues to derive strength from the vast experience of the promoters in the music industry. CARE will take a final view on the ratings, once the exact implications of the above development on the business and overall credit profile of the company are clear,” CARE Ratings said in press release dated May 19, 2021.

India is the fastest growing entertainment and media market globally and in the next five years India will see significant growth in OTT (over-the-top) segment. OTT segment is highly competitive with domestic music OTT platform like Saavn, Gaana & Hungama, international streaming platforms like Apple music, Amazon Prime, Google Play & others and telecom operator backed platforms like Jio music & Wynk music. The Indian Music segment grew 8.3 per cent to reach Rs 1,530 billion in 2019. It is expected to grow at a CAGR of 10 per cent to cross Rs 2,000 crore by 2022, on the back of increasing digital revenues and performance rights, CARE Ratings said in industry analysis.

TIL has been founded by the Taurani brothers - Mr. Ramesh Taurani and Mr. Kumar Taurani. The company is a holder of large number of audio rights comprising Bollywood film music, regional music, pop music etc. Over the years, Tips Industries built a repertoire of more than 29,000 songs over the years. The catalogue is dominated with music from the 90’s to early 2000’s. Its music rights are protected under copyright law for 60 years and film rights are owned in perpetuity.