In what would be a first for the sports business in India, the country?s oldest homegrown sports broadcasting firm Nimbus Communications is likely to hit the capital market soon in order to fund the expansion of its sports channel Neo Sports. The company is also said to be exploring all options to infuse funds in its sports broadcasting business.
Nimbus, the broadcast rights holder for all domestic cricket matches organised by the Board of Control for Cricket in India (BCCI), is likely to raise in excess of Rs 350 crore from its proposed initial public offer (IPO), sources in the investment banking sector said.
The proceeds of the proposed IPO will allow Nimbus to launch two new channels and expand in to North American markets, informed sources in the finance ministry.
Nimbus is currently finalising its draft red herring prospectus, a step towards an IPO. In order to float its IPO, Nimbus is currently seeking the necessary government approvals to acquire controlling stakes in its various group companies like Zenith Sports and Paramount Corporation. Nimbus has applied to the Foreign Investment Promotion Board (FIPB) seeking permission to acquire a majority stake in Zenith Sports from Paramount Corporation. Nimbus may fund Neo Sports expansion via Zenith Sports, FIPB sources indicated. Zenith Sports undertakes sports production, coverage and distribution activities for Nimbus.
Last year, Nimbus had roped in private equity firms including Oman Investment Fund and 3i Sports Media Mauritius for a reported amount of Rs 258 crore. Both 3i and Oman Investments together own around 60% in Nimbus Communications. But this time around, Nimbus is eyeing an IPO, sources in the investment banking sector said.
However, senior executives in the company denied that it has any plans to expand Neo Sports or look at an IPO. ?Any funding plan requires the board’s approval. So far, the matter has not come before the board,? a Nimbus executive said. According to industry sources, apart from IPO, Nimbus may again look at the private equity investors or even an QIP.
The size of the sports broadcasting market, mainly led by cricket broadcast, is currently pegged at around Rs 1,500 crore annually. It is split primarily between ESPN Star Sports, Nimbus and Multi Screen Media (Set Max channels). This business has almost doubled in size within past three years primarily due to the huge commercial interest in the IPL and its impact on cricket viewership in the country.