CRISIL Launches IPO Grading Service

CRISIL Launches IPO Grading Service

Mumbai - August 10, 2006

CRISIL Assigns CRISIL IPO Grade 2/5 to Shree Ashtavinayak Cine Vision's IPO

Proposed public issue of 3,300,000 equity shares at a target price of Rs 158 per share aggregating Rs 520 million

CRISIL has assigned a 'CRISIL IPO grade 2/5' to the proposed initial public offer of Shree Ashtavinayak Cine Vision Ltd (SACVL). The grading reflects the successful track record of the management, which has created a name for itself in film industry in a short span of three years, and the fact that SACVL is one of the country's leading film producers and one of the leading distributors in the Mumbai territory.

The grading is, however, constrained by the risks inherent in the Indian film industry where entry barriers are low and the susceptibility of the business model to both rapid changes in audience tastes and preferences and uncertainties arising out of the rudimentary methods used for arriving at the value of a film and its components. In addition, the company has a relatively short track record of proven performance, has a high dependence on the skills of its managing director and majority shareholder, and has a relatively under developed corporate governance system.

About the Company

Shree Ashtavinayak Cine Vision Ltd. (SACVL) was incorporated in October 2001 as a private limited company. Initially, the focus of the company was on production of television serials. The focus of the company changed to film production and distribution after the induction of Mr. Dhilin Mehta, the present Managing Director, on the Board of Directors in March 2002. The company was converted into a public company in June 2004. SACVL has produced 4 films and distributed 21 films to date. In film distribution, SACVL's presence is mainly restricted to the Mumbai territory. The company also has a small presence in film exhibition through tie-ups with 25 theatres across the Mumbai territory for screening content selected by it. For the year ended March 2006, SACVL reported a net profit of Rs 74.7 million on operating income of Rs 603.4 million, as compared to PAT of Rs 3.5 million and operating income of Rs 265.5 million in 2004-05.

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