04-10-2006, 06:56 PM
MUMBAI (Reuters) - Sun TV Ltd. has raised six billion rupees ($134.2 million) in the biggest initial public offering this year so far that valued the company at around $1.3 billion, a source close to the development said on Monday.
Sun, which sold 6.9 million shares, or 10 percent of the company, would become the second most valuable media company, after Zee Telefilms Ltd., valued at $2.3 billion.
Analysts said with Zee planning to split into as many as four separate entities, Sun has the potential to become the single largest media company.
But Sun's record for issue size could soon be surpassed by Reliance Petroleum Ltd., a unit of Reliance Industries Ltd. Reliance Petro is conducting roadshows to raise about $624 million this month.
Banking sources said the strong demand for Indian IPOs was reflected in the reception for Sun. The demand for Sun's shares stood at about 45 times the offer size, with most bids from institutions at the top end of the band.
Investment bankers expect Indian companies to raise more than $20 billion from public share sale in 2006, compared to about $15 billion in 2005.
Some of the major IPOs in 2006 could be from Hutchison Essar Ltd., the mobile phone operator, and construction group, DLF Ltd.
If DLF manages to raise about $2 billion being speculated in the banking circles, its issue could become the biggest ever IPO in the country, said Sanjeev Khandelwal, director at Prime Database, an IPO tracking firm.
"For Indian IPOs, 2006 could be the best-ever year," said Khandelwal adding, "there are many banks' and construction companies' IPOs which are in the pipeline."
Sun, founded by Kalanithi Maran -- brother of India's Telecommunications Minister Dayanidhi Maran -- is prominent in the southern Tamil Nadu state with four channels, including a 24-hour news channel. It also runs two Malayalam language channels.
It also runs FM radio stations in the cities of Chennai, Coimbatore and Tirunelveli.
The firm, which currently operates from a political party's premises, would use the IPO proceeds to launch three regional news channels and build its corporate headquarters, it had said in the offer document.
Sun reported a net profit of 614 million rupees and total income was 1.58 billion rupees for the first half year ended on Sept. 30, 2005.
The date of commencement of trading is yet to be decided, the source said.
Kotak Mahindra Capital Company Ltd. and DSP Merrill Lynch Ltd. were managers to the issue.
Sun, which sold 6.9 million shares, or 10 percent of the company, would become the second most valuable media company, after Zee Telefilms Ltd., valued at $2.3 billion.
Analysts said with Zee planning to split into as many as four separate entities, Sun has the potential to become the single largest media company.
But Sun's record for issue size could soon be surpassed by Reliance Petroleum Ltd., a unit of Reliance Industries Ltd. Reliance Petro is conducting roadshows to raise about $624 million this month.
Banking sources said the strong demand for Indian IPOs was reflected in the reception for Sun. The demand for Sun's shares stood at about 45 times the offer size, with most bids from institutions at the top end of the band.
Investment bankers expect Indian companies to raise more than $20 billion from public share sale in 2006, compared to about $15 billion in 2005.
Some of the major IPOs in 2006 could be from Hutchison Essar Ltd., the mobile phone operator, and construction group, DLF Ltd.
If DLF manages to raise about $2 billion being speculated in the banking circles, its issue could become the biggest ever IPO in the country, said Sanjeev Khandelwal, director at Prime Database, an IPO tracking firm.
"For Indian IPOs, 2006 could be the best-ever year," said Khandelwal adding, "there are many banks' and construction companies' IPOs which are in the pipeline."
Sun, founded by Kalanithi Maran -- brother of India's Telecommunications Minister Dayanidhi Maran -- is prominent in the southern Tamil Nadu state with four channels, including a 24-hour news channel. It also runs two Malayalam language channels.
It also runs FM radio stations in the cities of Chennai, Coimbatore and Tirunelveli.
The firm, which currently operates from a political party's premises, would use the IPO proceeds to launch three regional news channels and build its corporate headquarters, it had said in the offer document.
Sun reported a net profit of 614 million rupees and total income was 1.58 billion rupees for the first half year ended on Sept. 30, 2005.
The date of commencement of trading is yet to be decided, the source said.
Kotak Mahindra Capital Company Ltd. and DSP Merrill Lynch Ltd. were managers to the issue.