Golden Harbour Films Ltd

(CASE ON PUBLIC ISSUE)

Prepared by Click to edit Master subtitle style Sonali Vasa Jayesh Lalakiya

4/24/12

Introduction

GHFL is in the entertainment industry producing tele films, feature films, post production facilities and marketing and distribution of films. GHFL plans to come out with a public issue as an IPO to finance the expansion plan.
4/24/12

Networth Rs. 500 lacs in the past two years. The present shareholding pattern of GHFL

4/24/12

Issue IPO following information have been given

Mr. crow and associates 78% Mr. jackie fan 16% Mr. random lee 6% Total share capital is Rs 100 lacs (Rs. 10 each).

The proposed issue is for size of Rs.

The company have following financial at the end of the previous financial year 2005. Particular
sales Income for dist. Income for post production Gross profit (Before DFC) Interest Depreciation Tax provision Net fixed assets

Rs. (Lacs)
1200 700 2000 1638 540 320 233 2342

Particular
Cash and bank balances Post production equipment Payments pending to producers Stock of films pending to produce Unpaid stock of films Long term loans General reserve Accumulated P&L a/c

Rs. (Lacs )
220 269 285 200 245 1200 345 842

Stock of films under develop 365 Distribution receivables 4/24/12 500

Compute the following with respect to the issue.

The valuation of share for the acquisition to be made by Mr. crow of the shares held by the other 2 partners.

The floor price of share for the proposed IPO based on the lower of twice the book value or 12 time the current EPS.

The standard financial ratios to be furnished as per SEBI requirements and the calculation

4/24/12

Issue Structure Table

Issue size and number of shares on offer 10% of the issue to be firmly placed with hong kong and shanghai bank. 10% reserved for allotment to foreign institutional investors on competitive basis. 10% reserved for the employees of GHFL

4/24/12

Solution

The valuation of share for the acquisition to be made by Mr. Crow of the shares held by the other two partners in Rs. 201.50. The floor price of share for the proposed IPO based on the lower of twice the book value or 12 times the current EPS as at the previous financial year as per the above data is Rs 366 per share. 4/24/12

Financial Ratios

EPS = Rs. 54.50 RONW = 29.74% NAV per share per issue = Rs. 183.20 NAV per share post issue = Rs. 265.50 Minimum RONW on increased net worth required to maintain pre issue EPS = 20.53%
4/24/12