Inspire Films Limited IPO

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i. Inspire Films is primarily engaged into the business of creation, production, distribution, and exhibition of television and digital content across broadcasting channels, apps and digital platforms as well as content writing, production and sale, purchase of rights. They are involved in every aspect of the content-making process, from development to distribution. This includes financing the projects, hiring actors and crew members, scouting locations, creating sets, managing the budgets, and overseeing the entire production and post-production process.

ii. The company has a B2B Business Model, and they currently operate in 3 different Business verticals:

a) TV – Hindi GEC (General Entertainment Channels)- This is content creation for the linear broadcast channels. These channels include Star Plus, Star Bharat, Colors TV, Zee TV, Sony, Dangal, Shemaroo etc. Typical contracts given here are 1 year / 260 episodes (5 days a week)/ 312 episodes (6 days a week) or 1 year / 52-156 episodes (1-3 days a week) which then get renewed on yearly basis, based on the show performance. Each episode (including commercial advertisement) is 30–60-minute slot.

b) Digital Content and platforms (OTT)- This is content made for platforms such as Netflix, Amazon, Sony Liv, MX Player, Disney+Hotstar, Voot, Zee5, etc. OTT Platforms have become increasingly popular in recent years due to their convenience and flexibility, allowing consumers to watch their favourite shows and movies on a variety of devices, including smartphones, tablets, laptops, and smart TVs. They also offer a wider range of content options compared to traditional cable TV. The contracts for OTT are typically 8 to 10 episodes for 45–60-minute episodes and 25 to 60 episodes for 22-25- minute episodes, which then gets extended to multiple seasons based on the popularity of the season.

c) Regional content- This is content produced for regional language channels in various channels – Telugu, Tamil, Malayalam, Bengali, Marathi etc. Both the models above apply in a similar manner in the regional space.

iii. The team includes the following:
1. Producers: responsible for creating business opportunities, developing business relations, overseeing the production and managing the budget, scheduling, and logistics.
2. Creative Team: responsible for creating ideas, concepts, formats, characters and visualizing the final products.
3. Production Team: responsible for budgeting, production planning, scheduling, hiring of talents, management of studio floors, sets, workers, agreements, commercials and execution of projects.
4. Researchers: responsible for finding, collating and presenting research materials as per the creative team’s vision and requirements for various projects.
5. Directors: responsible for executing the creative vision of the projects, working with actors, technicians and supervising the overall creative execution of the products.
6. Writers: responsible for creating screenplays, dialogues and storylines for the production.
7. Editors: responsible for editing and refining the footage and audio to create the final product.
8. Cinematographers: responsible for capturing high-quality video footage.
9. Sound Designers and Engineers: responsible for capturing and editing audio, including dialogue, sound effects, and music.
10. Graphic Designers and Animators: responsible for creating visual effects, visual assets, 3D and 2D characters, models, logos, title sequences, and other graphics.
11. Production Designers: responsible for creating set designs, properties and executing sets for projects.
12. Costume Designers: responsible for designing and executing costumes, jewelleries, accessories for all characters.
13. Post-production Team: responsible for managing post-production studios, editing facilities, music, background score, sound, VFX, grading, mastering, transferring content to client and archiving.

Competitive Strengths

i. Experienced and Strong Management team:
ii. Organized and focused marketing team
iii. Established operations and proven track record.

Objects of the Inspire Films Limited IPO:

The company intends to utilize the net proceeds from the issue towards the funding of the following objects: i. To meet the Working Capital requirements of the Company. ii. To meet the General Corporate Purposes. iii. To meet the Issue Expenses.

Inspire Films Limited IPO Details:

Open Date: Sep 25 2023
Close Date: Sep 27 2023
Total Shares: 3,598,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built Issue IPO
Issue Size: 21.23 Cr.
Lot Size: 2000 Shares
Issue Price: ₹ 56 - 59 Per Equity Share
Listing At: NSE Emerge
Listing Date: Oct 06 2023

Promoters And Management:

i. Mr. Yash Arabinda Patnaik, aged 50 years, is the Managing Director and Promoter of the company, boasts of more than twenty-five years of experience in the media and entertainment industry. He was appointed as Managing Director of the Company for 5 years w.e.f 11-07-2023. He has previously served as an Executive Producer and Writer for various television shows. In addition to his managerial role, Mr. Patnaik has also written and creatively produced many of his television series. He has been a Jury Member of the International Emmy Awards (Los Angeles). ii. Mrs. Mamta Yash Patnaik, aged 48 Years, is the Executive Director and “Chief Creative Officer” of the company, contributing her creative vision to the endeavors. She a screen writer, producer, creative director and poet and has experience of over 25 Years in the Media Industry and has created and written over 50 television shows and web series. She started her career in the advertising industry with Trikaya Grey and managed many national and international brands. Mrs. Patnaik is the driving force behind the creative team, infusing her content with originality and language that is both inventive and impactful. In 2012, she co-founded “Inspire Films Private Limited” with Mr. Yash Arabinda Patnaik, aiming to produce premium content that resonates with the audience and leaves an indelible impression. iii. Mr. Kameswar Rao Subudhi, aged 50 years, is the “Executive Director” and “Chief Financial Officer” of the company. He was appointed as the Executive director of the company on 29-07-2023. He is a Chartered Accountant and also holds a degree of LLM in Corporate and Financial Law. He leads the Finance team. He has an experience of over 24 years in design, development, and implementation of Financial & Commercial strategies that commensurate with the Organizational goals and objectives aiming to accelerate growth. He has been previously working with STAR India, Mumbai as head of the commercial operations.

Financials of Inspire Films Limited IPO:

Particulars ( In Lakhs )
Revenue from Operations 1,938 3,815 4,883
Other Income 4 0.5 1.7
Total Revenue 1,942 3,815 4,885
Cost of Production 1,517 3,267 4,068
Changes in inventories 271 184 -273
Other Expenses 102 232 376
EBITDA 52 133 714
Depreciation & Amortisation 76 48 61
Finance Cost 88 45 100
EBIT -24 84 653
OPM (%) 2.70% 3.48% 14.61%
PBT -111 40 553
Tax -28 14 148
PAT -83 26 405
NPM (%) -4.27% 0.68% 8.29%
No.of Shares 136.09 136.09 136.09
EPS -0.61 0.19 2.97

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
Inspire Films Limited 49 4 2.97 19.8 59 80
Balaji Telefilms Limited 593 -38 -3.67 N/A 65 658
Bodhi Tree Multimedia Limited 43 3 2.61 51.5 134 168
V R Films and Studios Limited 11 1 1.01 46.9 47.4 52
* All the Data is as per FY23.

Recommendation on Inspire Films Limited IPO:

Review And Recommendation of Inspire Films SME IPO by IZ team is 3/10

A) Business Overview

Inspire Films operates in the media and entertainment industry, specializing in the creation, production, distribution, and exhibition of content across TV, digital platforms, and regional languages. The company's business model is B2B, catering to different verticals: 1. TV – Hindi GEC: Contracts with major channels like Star Plus, Colors TV, Zee TV, etc., typically lasting for 1 year and ranging from 52 to 312 episodes. 2. Digital Content and OTT Platforms: Produces content for platforms such as Netflix, Amazon, Sony Liv, etc. Contracts are usually for 8 to 10 episodes for 45–60-minute formats and can extend to multiple seasons. 3. Regional Content: Produces content for regional language channels, applying similar contract structures as TV and digital platforms

B) Cost Structure

1. Actors: 25% 2. Talent and Crew: 18% 3. Studio Rentals: 32% 4. Production: 9% 5. Post-Production: 7% 6. Overheads: 9% Profit Margin - Generally, a 10% profit margin over the budget of each project.

C) Team Composition

1. Producers: Business development and overall management. 2. Creative Team: Conceptualization and vision. 3. Production Team: Execution and logistics. 4. Researchers: Content validation. 5. Technical Teams: Editors, Cinematographers, Sound Designers, etc.

D) Competitive Strengths

1. Experienced Management Team: Proven track record in successful content production. 2. Strong Marketing Team: Highly organized and focused, ensuring optimum visibility and reach. 3. Proven Track Record: Established operations that have consistently delivered.

E) Risks and Challenges in the Film Production Business

1. High Production Costs: Initial investments is substantial. 2. Market Volatility: Audience preferences are hard to predict. 3. Distribution Risks: Even after a film is made, its successful distribution is another hurdle. 4. Regulatory Hurdles: Compliance with multiple regulations. 5.Uncertain ROI: Even after substantial investment, there's no guarantee of the film being a commercial success.

F) Final Conclusion

The media production industry, in which Inspire Films operates, is fraught with multiple risks. The company must first invest in developing a script and concept, which is then presented to TV channels and OTT platforms. Only upon approval does the production process commence, with the initial investment being shouldered entirely by the company. This makes the return on investment (ROI) highly uncertain, especially if the show fails to garner viewership. Additionally, the payment cycle for the company is rather elongated. Typically, Inspire Films receives its payment three months after the show goes on air. This can strain cash flows and affect operational efficiency. Moreover, the profit margins for the company are relatively low, capped at 10% above the budget of the show. For instance, if the company invests ₹100 Cr in a show that generates ₹300 Cr in revenue for the channel, Inspire Films would get back its initial investment of ₹100 Cr, plus 10% of the additional ₹200 Cr, which is not a substantial margin. In some cases, performance-linked incentives based on viewership or ratings offer an additional revenue stream, but these are not guaranteed.

Market Comparison and Performance

When we look at comparable entities like Balaji Telefilms, the outlook is not encouraging. Balaji has been underperforming for years, showing continuous losses and providing negative returns to its investors over the last decade. Another peer, Bodhi Tree Multimedia, also does not exhibit a robust financial performance.

Conclusion: Investment Outlook

Given the inherent risks, payment delays, and modest profit margins, investing in Inspire Films—or similar media production companies—does not seem to offer a compelling investment opportunity. The business model lacks the robustness required for sustainable long-term returns, as evidenced by the underperformance of industry peers. For an investor looking for stable returns and lower risk, this sector may not be the ideal choice. Therefore, it would be advisable to exercise caution and conduct a thorough due diligence process before making any investment decisions in this industry.

Lead Manager of Inspire Films Limited IPO:

  1. Narnolia Financial Services Ltd

Registrar of Inspire Films Limited IPO:

  1. Maashitla Securities Pvt. Limited.

Company Address:

Inspire Films Limited 111, 1st Floor, Shree Kamdhenu Estate, Chincholi Off Link Road, Bhd Tangent Showroom, Charkop, Malad Mumbai - 400064 Phone: 022- 46095834 Email: Website

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