Sun TV plans to enter Capital Market

Kishore Sharma - Televisionpoint.com
After living in a state of complete denial for over six years, the satellite king of the South and media baron, Kalanidhi Maran, Chairman and MD of Sun Network, has finally decided come out of the shell to take the plunge into the capital markets.

According to sources, Sun Network, which controls India's second largest satellite television network Sun TV, is expected to hit the markets somewhere around March-April of 2006 to raise RS 600 crores. The turnover of the company, as of year ending March 31, 2005, was at RS 600 crore.

According to sources, the group, which is preparing its Red Herring Prospectus is expected to approach the SEBI very soon to seek approval for its maiden offering. Kalanithi Maran was unavailable for comments. Sources close to the developments said that Sun Network has also zeroed down upon the book running lead managers (BRLM) for its proposed IPO. DSP Merrill Lynch Limited (DSPML), one of India's leading investment banking and wealth management companies, and Kotak Securities have been appointed as the BRLMs for the proposed IPO which, according to sources, is expected to take the 100 per cent book-building route. The proceeds of the IPO are expected to be used by Sun to launch new channels and acquisitions.

The proceeds from the issue is likely to be used for the company's proposed expansion. Sun Network is planning to launch a slew of new channels including one Hindi general entertainment and one National news channel. This also includes a channel for kids and regional sports. Sources close to Sun Network also say that Maran is currently in talks with Ronnie Screwvala, founder chairman of Mumbai-based entertainment major United Television, UTV. It is expected that Sun may launch the Tamil version of UTV's kids channel Hungama TV.

After deciding to ride the stock market boom in 1999, when it was rumoured that Sun was planning to come out with a RS 1,200 crore IPO, Maran subsequently shelved his plans to raise public money after the great Internet bubble burst. Since then, Maran had been consistently maintaining that he had no plans to go for an IPO.

Sun TV, which runs thirteen channels in South India, is mainly run on the strength of its original content. The network controls over 50,000 hours of original content a year and are constantly adding to this vast value of content. Sun also has a significant global presence with the channels running in countries like US, Australia, Malayia and South Africa. Besides channels, Sun Network runs four FM Radio Stations, two daily newspapers and four magazines in several Indian languages. The media major has an employee strength of around 6000 people.