Below is a verbatim transcript of the interview.
Q: Could you confirm to us the quantum of funds that you would like to raise and when would you be raising these funds and what would they be used for?
A: It is a market buzz and we have not put out any word in the market. According to us the stock should be buzzing purely on back of business performance that the company has been able to deliver. We plan to deliver Rs 30 crore swing in profit from Rs 18 crore loss, to almost a Rs 12-13 crore profit this year. So that in itself should be able to make the stock buzz and it is not just about fund raising exercises.
Q: So are you planning to raise any funds in the due course of time for any of your initiatives?
A: That is true. We have been looking at funds, but I hope the market doesn’t respond to only fund raising rumours in that sense. It also responds to good business performance. We have been looking at raising around USD 10 million. It is primarily for deployment in new projects that we have launched.
We have launched our Delhi, Bangalore and Pune editions over the last couple of years where obviously there is a gestation period till they breakeven. There have been debts that have been taken and we plan to replace some of this debt with equity.
Q: What does your debt level stand at as of now?
A: In our operating company we would be in the range of around Rs 35 crore.
Q: You talked about launches in three new cities. We understand that it is actually 10 cities that you are looking at. Could you give us a ballpark figure of how many editions you are currently planning to target and what are the number of editions that you currently run?
A: We currently run around four editions, which is Bombay, Delhi, Bangalore and Pune. At one point of time, we were looking at the beginning of last year at launching in six new cities but the entire global economy tanked, the marketing budgets were slashed. So we are looking at an appropriate time when we can launch new editions. But right now we are looking at stabilizing these four editions—that is critical for us.
Q: You have already shelved plans of new launches, so how do you hope to achieve this target of Rs 30 crore that you have given us in terms of profitability? Have ad rates gone up?
A: There has been increase in ad volumes in the second half of the current financial year. That definitely has happened, the economy has revived. Ad rates are going up. There is slight depreciation in the newsprint prices, so we are getting benefit of that. Also, there is some adjustment in terms of fixed cost that most companies have taken. We have also undertaken some fixed cost realignment which will give some long-term benefits to the company. So to that extent profits have improved dramatically and shareholders should be pleased.
Q: How much by way of equity dilution are you looking at for this USD 10-12 million?
A: At this juncture I will not get into that.
Q: When can we expect this fundraising to be completed?
A: We should have something done before the festive season which is October; we should be able to announce something positive.
Q: Where have the newsprint prices stabilized as of now?A: Current year average is around USD 525. Next year, we believe, they will keep rising and next year’s average price should be in the range of USD 615, they will settle at around USD 650 at the end of the year. But it will average out to somewhere around USD 615-620.
Work From Home with world's #1 internet wealth advocate for making money online