Magnasound plans to raise Rs 22 cr via private placement in January
music-from-india.com
Anamika Rath (10/20/99 FE)
Mumbai, Oct 19: Music publishing major Magnasound is planning to raise around Rs 22 crore through a private placement of shares in January 2000. This closely-held company with an equity base of Rs 3.26 crore has appointed DSP Merrill Lynch as the manager for the offering.
The proceeds will be utilised to fund its restructuring exercise.
Magnasound (India) chairman and managing director Shashi Gopal told The Financial Express: "We plan to segment our business into focussed groups and have different labels catering exclusively for Bhangra music, Hindi Pop, instrumentals etc. We also plan to regionalise our business by creating profit centres."
The company is seen to be moving from a record company to a company with several labels, point out industry observers. As part of labelising its business, a separate team will be working for each genre of music and they will be responsible for its performance. "In this way we are able to position our products in a more sophisticated manner for the consumer," said Gopal.
To regionalise its business, the company is setting up six autonomous profit centres. There already exists six branches; each working as part of the central office operations. Now the company is moving to a six state operation where each state will work as a separate profit centre.
Says Gopal: "It will be like taking the national branding exercise to regional markets. The centres have been instructed to identify local talents and look at the head office only for consultation purposes."
Each centre will have the same look and the same standards of management, presentation, promotion, advertising and artists management as the head office. During 1998-99, During 1998-99, the company posted a turnover of Rs 20.57 crore in 1998-99, which marks a 22 per cent growth over Rs 16.81 crore in the previous year.
Net gains
The next time you want the latest Daler Mehandi cassette, you don't have to run to the nearest music shop. Instead just log on to music-from-india.com, the Magnasound website and order online. To be operational from the next week, the website lists about 1,500 Magnasound titles. About 20 cities across the country including metros and mini-metros can avail of this facility. For delivery purpose, the company is tying up with a direct marketing company which is expected to deliver goods within 48 hours. The mode of payment has been restricted to cash on payment for the time-being. Says Magnasound (India) chairman and managing director Shashi Gopal: "Since the credit card verification system is not in place as yet, we will wait before allowing payment by card."
While the company has already made an initial investment of Rs 5 lakh on creating the website, an investment of Rs 10 lakh has been budgeted this year to make buying on the net possible.
However, Gopal is not overenthused about the net endangering its existing distribution mediums. He says: "Being on the net is just another avenue of distribution and exposure," which explains why the company is also making investments in this area. |
