According to a draft prospectus of the public issue filed with the Securities and Exchange Board of India (SEBI), the regulatory body for the stock markets in India, the public issue is of 1,48,60,000 equity shares of Rs 2 each issued for cash at a premium of Rs 8 per share aggregating Rs 1,486.00 lakhs.

The company would offer about 25 per cent to the public. The draft prospectus, a copy of which is in possession of indiantelevision.com, says that the shares are slated to be listed on The Delhi Stock Exchange Association Ltd. (regional stock exchange), the Bombay Stock Exchange (BSE) and The National Stock Exchange of India Limited (NSE).

Incorporated as B.A.G. Films Private Ltd. on 22 January, 1993 at New Delhi, the company was converted into a public limited one vide a special resolution passed on 3 March,2001 and renamed as B.A.G. Films Limited on 29 March, 2001.

The lead managers to the proposed issue is the Mumbai-based KJMC Global Market (India) Limited, while the registrar to the issue is Alankit Assignments Ltd.

Post the initial public offering (IPO), the promoter group's shareholding in the company is slated to go down from 52.74 per cent to 39.45 per cent. The employees’ shareholding too would decline to 0.13 per cent from 0.17 per cent. Financial institutions like UTI and IDBI that hold 36.01 per cent in BAG Films at present would see their holding declining to 26.93 per cent. UTI Asset Management Company is also amongst the top 10 shareholders in the company.

The net worth of the company as on 31 October, 2002 was Rs. 832.45 lakhs (Rs 83.24 million). The average cost of acquisition of equity shares of the promoters is Rs.1.02 per share and the book value per share, as on 31 October, 2002, is Rs 2.95. There is also no contingent liability as on 31 October 2002, according to the draft prospectus.

Major Business Opportunities: Business opportunities listed by B.A.G. Films, according to the draft prospectus, are the following:

- Increasing demand of quality software and trained and qualified professionals

- Demand for diversified programme mix - entertainment, film and film-based programmes, sitcoms, news and current affairs, game shows

- Demand and high scope for software producers capable of producing technologically contemporary and viewers’ demand driven programmes.

- Increasing penetration of regional and niche channels in India.

- Increasing demand for organized and well equipped educational institutes and centers of excellence for imparting skills and nurturing talent

As part of the growth strategy, the company has stated that software companies would require having a diversified portfolio and flexible programming methods capable of adapting to changing viewer demands quickly and effectively. It has also been pointed out that the channel mix is also important and software production houses should have presence in Hindi, regional and niche channels.

The launch of film production, though no prior experience is there, is being done to create a larger business platform and multi-tasking of the infrastructure to produce films and television software and value added videos is a must, the company has said.

B.A.G. Films has said that details of the proposed Media School, which was supposed to become operational by September 2001 are nearing completion. The land for the school has been acquired and building plans are being prepared.

Interestingly, in the draft prospectus, it has been stated by B.A.G. Films that the first set of courses will be launched in August 2003 and school will initially operate from the present studio complex of the company till the completion of the building.

B.A.G. Films has also pointed out that the media school being a relatively new concept, the company would enjoy the first mover's advantage and efforts are on to finalise associations with established international institutes that would help in absorption of best practices.

Since the company doesn’t have any prior experience of producing a feature film, B.A.G. Films has stated that considering the new dynamics of the film distribution business, experience does not play much of a role anymore. Many national and international distribution agencies have started operating in India. Using professional distributors and exhibitors for its films in India and worldwide will reduce the risk for the company, it says.

"The production of feature films is merely a plan as on date, since the company has only selected two books for the story of feature films to be produced by it and work on conversion of one of the book into a screenplay has been started," the draft prospectus quotes B.A.G. Films as stating.