UTV: Stock surges

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UTV Software Communications surged 7.81 per cent to Rs 309.10, after announcing its plans to offload stake in a film production subsidiary by listing it on the Alternative Investment Market of the LSE. The weekly trading volume was up from 92,292 shares to 486,964 shares.

UTV's board approved the transfer of all film production agreements to the subsidiary and the sale of up to 25 per cent to private investors or through an initial public offer, the company said in a release to BSE. UTV Software will spin-off its three core businesses (broadcasting, new media, movies) into separate wholly-owned subsidiaries, to unlock value as well as focus on separate verticals. This will also enable the verticals to raise independent funds.

UTV Software registered a net loss of Rs 0.92 crore in Q3 December 2006 compared with a net loss of Rs 5.94 crore in Q3 December 2005. Net sales dipped 31.70% to Rs 23.92 crore (Rs 35 crore).

UTV Broadcasting, the 100% subsidiary of UTV, will house all the broadcasting initiatives of the company. UTV-UK, UTV's second subsidiary, will house UTV's new media initiatives. The third subsidiary, yet to be formed, will be for the movies division.