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Network18 Media and Investments Ltd, the diversified media conglomerate with interests in print, broadcasting, films and Internet, just announced in a filing to the Bombay Stock Exchange that it has confidentially filed a draft registration statement with the US Securities and Exchanges Commission for an initial public offering of American Depository Shares in its Internet subsidiary Web18 Holdings Ltd. This means the filing itself, which usually provides a wealth of information about the company, will not be made public any time soon.
There have been reports of a dilution through ADRs as early as February last year, and Web18’s aggressive expansion was always seen as part of an exercise to create valuation for an eventual listing. The company has an impressive array of destination sites such as ibnlive.com, moneycontrol.com, tech2.com and cricketnext.com. In May last year, the firm launched the aggregator In.com, which, the company claims, has become the second largest Indian portal, citing December 2008 data from Comscore (NSDQ: SCOR).
We spoke to group CFO R.D.S Bawa, who said the filing was made sometime in the last two months and the registration process will take at least another six months to complete. He declined to comment further citing confidentiality norms. When listed, the firm will join Rediff (NSDQ: REDF) and Sify on Nasdaq.
“The number and dollar amount of ADSs proposed to be offered and sold have not yet been determined,” the release says. Our sources in the company also say that the amount of money to be raised is an open figure right now and will depend on the market conditions as the firm gets closer to the listing. We are somewhat surprised by the timing of the filing given the market conditions, but possibly the company did not want to stop the complex registration process once it was set in motion. One person familiar with regulatory filings, who asked not to be named, said the company can always push back the actual date of listing even after the registration process is complete.
TV18 India Ltd, of which, Web18 is a subsidiary, announced the earnings for the quarter ended 31 December. Following are the figures for the Web18 division. Net loss has dropped by 14% q-o-q to Rs21.2 crore, while the y-o-y comparison shows a 123% rise in net loss. While revenue was at Rs17.4 crore, a marginal dip from Rs17.6 during the same quarter last year, it rose 14% quarter on quarter. While expenses rose 40% y-o-y, the q-o-q rise in expenditure has only been 2%. While rising y-o-y expenses are natural for an expanding firm, flat sales figures raises the question if the firm is not being able to adequately monetize the huge traffic it is claiming.
The full press release is here.