This film production & distribution company stock has zoomed 108% in 8 days

On Tuesday, shares of Tips Films were locked in 10 per cent upper circuit at Rs 630 and has zoomed 108 per cent from level of Rs 303.2, which it had touched on October 13.

Shares of Tips Films were locked in 10 per cent upper circuit at Rs 630 in Tuesday's intra-day trade, in an otherwise weak market.  In comparison, the S&P BSE Sensex was down 0.37 per cent at 59,607 points.

In the past eight trading days, the stock of film production, distribution & exhibition firm zoomed 108 per cent from Rs 303.20 apiece, which it had touched on on October 13.

On Tuesday, the BSE sought clarification from Tips Films Ltd with reference to significant movement in price, in order to ensure that investors have latest relevant information about the company and inform the market so that the interest of the investors is safeguarded. The reply is awaited.

Shares of Tips Films got listed on October 6, 2022 pursuant to the scheme of arrangement & demerger between Tips Industries (demerged company) and Tips Films (resulting company).

With the view to create separate and focused entities for Music and Film businesses, unlock shareholders’ value, capture attractive growth opportunities, the board of directors, at its meeting held on May 10, 2021, approved the scheme of arrangement and demerger between Tips Industries and Tips Films.

Globally, India is second in digital consumption of services, following China. In 2021, video subscriptions grew 29 per cent as sports content went behind paywalls. Paid subscriptions, too, crossed 80 million and generated Rs 5,600 crore in revenues.

OTT players, on the other hand, are expected to spend Rs 300 billion on content over 2021-25. Meanwhile, Netflix, Disney and Amazon are expected to spend $66.6 billion on content in CY2022, a growth of 18.2 per cent YoY, the company said.

"The company will write off 100 per cent of the cost of the movie within 12 months of release. Earlier 60 per cent was written off in the first year, and the remaining over 9 years," the management added.

“Tips Films’ success ratio is over 85 per cent. This is because the company continues to monetize the film long after its Box-Office release. Hence, a library of 50 films is expected to generate substantial Free Cash Flow for perpetuity.

That apart, for large budget films, Tips Films has developed a partnership model where it partners with actors and other producers on revenue sharing basis, which limits risk.