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US, European MFs keen on pecking Gramophone issue

Our Bureau

CALCUTTA, Feb. 25

MAJOR American and European mutual funds have shown interest in subscribing to the Rs. 125-crore private placement equity issue of Gramophone Company of India Ltd (GCI).

The GCI Vice-Chairman, Mr. Sanjiv Goenka, said: ``Within 24 hours of our getting the minority shareholders' approval for this equity issue, we have completed the book-building process and the issue has been subscribed over 11 times.''

The GCI management has decided to allot seven lakh equity shares at a price of Rs. 1,785 mainly to overseas MFs and FIIs. Some private banks, who showed interest, have been voted out. The issue would be completed after the approval by appropriate authori ties and ratification by the GCI board, Mr. Goenka said.

GCI went in for this issue to fund major projects in the area of entertainment including dot.com business. The money would also be utilised for reduction or elimination of GCI's Rs. 40-crore debt (whose annual service charge is Rs. 8 crores), fresh acqui sitions and cost restructuring.

With a thrust in e-business, GCI is seeking to position itself as a global music major keeping the Indian population worldwide in mind. Two portals are being planned, of which one will relate to the entertainment industry.

Alongside, the RPG group has embarked on restructuring of the various entertainment companies in its fold. RPG is exiting film business. Grammco films, the GCI subsidiary, will be merged with the parent. The same will be the case with RPG Music Internati onal, another GCI subsidiary.

Mr. Goenka is confident that as a consequence of the various restructuring and cost-control measures, GCI's turnover will double to around Rs. 250 crores in three years, with net profit increasing by 3.5 times, over the present level of around Rs. 3 cror es, during this period.

According to him, a Bhajan album by Lata Mangeshkar will be released soon. Rights of Yash Chopra's latest film, Mohabatten, have been bought recently. Numbers by Pankaj Udhas, Amjad Ali Khan and Suneeta Rao (Hindi pop album) are also in the pipeline. The rights of A.R. Rehman's next Tamil film have also been purchased.

GCI's current stock of numbers stands at 1.59 lakhs, of which 70 per cent is of songs and music recorded in the country. The capacity of the Dum Dum factory in West Bengal is being expanded from 45 lakhs to 55 lakhs per annum.