| MUMBAI:
Hyderabad-based DQ Entertainment (DQE), which has filed the preliminary draft
red herring prospectus, is considering a pre-IPO (initial public offering) placement. The
AIM-listed animation, gaming and entertainment company has announced that it will
dilute 25 per cent equity, offering 19.82 million equity shares of Rs 10 each.
About
the pre-IPO placement, DQE said, "Our company is considering a pre-IPO placement
of equity shares with various investors. We will complete the issuance and allotment
of equity shares pursuant to the pre-IPO placement prior to the filing of the
red herring prospectus with the RoC. If the pre-IPO placement is completed, the
number of equity shares offered to the public would be reduced to the extent of
such pre-IPO placement, subject to a minimum net issue size of 10 per cent of
the post issue paid-up capital."
The issue comprises a net issue to
the public of up to 18.8 million equity shares and a reservation of up to 991,282
shares for subscription by eligible employees. The net issue will constitute 23.75
per cent of the post issue paid up capital.
DQE also announced that at
least 60 per cent of the net issue will be allocated on a proportionate basis
to qualified institutional buyers (QIB) bidders. Five per cent of the QIB portion
will be available for allocation on a proportionate basis to mutual funds only,
while the company may allocate up to 30 per cent of the QIB portion to anchor
investors on a discretionary basis.
It
is learned that post IPO, the promoters' holding in the company will fall from
26.67 per cent to 20 per cent.
DQE will use Rs 1.09 billion out of the
net proceeds of the issue towards co-production, infrastructure and investment
in subsidiary company.
The company will use Rs 565.17 million from IPO
in co-production agreements, focusing on IP content creation. Further, Rs 392.31
million will be used towards development of office premises and production facilities
and development of infrastructure at the SEZ Unit, Kokapet Village in Andhra Pradesh,
The company will also invest Rs 129.22 million from the issue in the subsidiary,
DQ Entertainment (Ireland).
SBI Capital Markets will lead manage the issue. | 
