According to Mr Bhagnani, a maximum of twenty per cent of his company's capital will be diluted post the private placement as well as IPO. "This twenty per cent will be a combination of private placement and the public offering," he said. Mr Bhagnani said that the decision for a private placement comes in the wake of the present situation in the stock market which is not entirely favourable for an IPO. Earlier, Puja Entertainment had considered an IPO of about Rs 75 crore with an offer price of approximately Rs 165 per share. This was to be a domestic offering scheduled for March 2001. The IPO was to fund Puja Entertainment's expansion plans. The company plans to set up a fully integrated studio in Mumbai. This studio will consist of a preview theatre besides post-production facilities.

Other projects which are on the anvil include setting up a Web site titled "Direct To Theatre" and a television software venture. This will be for Zee, Star and Sony. Plans were also afoot to produce music albums. Puja Entertainment has an interest in the audio business which involves an arrangement with Tips. Tips, as per this arrangement, will source all its blank cassette frames exclusively from Puja.