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Bright Outdoor Media

• Bright Outdoor Media is coming out with an initial public offering (IPO) of 38,00,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 146 per equity share.

• The issue will open for subscription on March 14, 2023 and will close on March 17, 2023.

• The shares will be listed on SME Platform of BSE.

• The share is priced 14.6 times higher to its face value of Rs 10.

• Book running lead manager to the issue is Shreni Shares.

• Compliance Officer for the issue is Khyati Mishra.

Profile of the company

The company is engaged in the business of providing advertising services offering advertising media services consisting of Out of Home (OOH) media services. Its array of service hoardings includes Railway boards, Railway panels, Transfer stickers, Cinema slides, Promos, full train, Bus panels, Full Bus painting, Mobile sign truck, Kiosks, Traffic Booth, Toll Naka, Gantry and Vinyl. Apart from Out-of- Home (OOH) Advertising and providing various novel communication solutions to clients, the company also offers services assuring multicultural and ethnic Outdoor Advertising campaigns that engage audiences and achieve impact, for every creative need, idea and budget. Apart from business of providing advertising services, the company is also engaged in real estate business which mainly includes sale and purchase of properties and also sharing the same on rental/leave and license basis.

The company’s client domain mainly includes corporate clients operating in various business fields viz. Entertainment Industries, Construction, Education, Jewellery, Insurance, Financial service providers, Aviation, Government Organizations etc., thus providing it exposure to serve clients working in various industries and widening its exposure. The company has purchased the business of Bright Advertising Agency vide Business Purchase and Takeover Agreement dated April 01, 2007. The seller, Bright Advertising Agency, has been carrying on the business of Outdoor Publicity and Advertisement. Whereas, the Company has purchased the entire running business as going concern with all rights, claim, interest in the business and assets of the said sole proprietorship concern.

Proceed is being used for:

• Prepayment/repayment of certain secured borrowings availed by the Company.

• Purchase of LED Hoardings.

• Funding working capital requirements.

• General corporate purposes.

Industry overview

India’s advertising industry plays an important role, like in other world markets, in shaping sentiments towards products and services in the minds of its consumers. The brand recall for several companies over the decades has hung solely on the balance of their advertisements. From the “utterly, butterly delicious” Amul cartoon girl, to Vodafone’s Zoozoos, and being a Complan boy/girl, among numerous other tag lines that are synonymous with specific consumables, it comes as no surprise that the country has one of the most successful ad markets in the world. India has one of the fastest-growing advertising industries, recording just under 750 billion Indian rupees in revenues in 2021, indicating a speedy recovery since the pandemic. A high share of television ownership across the country made it the leading source of revenues for ads, having long overtaken print. Television in India remains the booming source for ads among traditional media – thanks mostly to a sustained love for daily soaps, reality shows, movies, and cricket in particular.

India outdoor advertising market is anticipated to grow at an impressive rate during the forecast period on account of growing spending on display advertisements and growing utilization of indoor advertising for publicity in end use industries. The advertising industry is one of the most important segments of media and entertainment industry. Among its types, outdoor advertising has been one of the fastest-growing segments in the advertising space of India. It represents a high potential opportunity for outdoor media advertisers as brand owners tend to spend a great fortune over advertising and brand promotion as this method ensures a far greater consumer reach. Also, the Indian government provides remarkable support to the advertising industry. The improving market sentiments, supportive policies by Reserve Bank of India and the opening of newly licensed banks in India is opening doors to various opportunities for advertising expenditure companies in the financial sector.

Pros and strengths

Own Inventory of Hoardings: The company is engaged in the business of providing advertising services offering advertising media services consisting of Out of Home (OOH) media services. Its array of service hoardings includes Railway boards, Railway panels, Transfer stickers, Cinema slides, Promos, full train, Bus panels, Full Bus painting, Mobile sign truck, Kiosks, Traffic Booth, Toll Naka, Gantry and Vinyl. Apart from Out-of- Home (OOH) Advertising and providing various novel communication solutions to clients. It installs hoardings at various locations depending on the customers’ requirements. It has its own inventory of hoardings. It also sublet the same or bid through various tenders for the said installation.

Repeat Customers: The company endeavours to maintain the quality of its services, follow strict procedures to ensure quality control, timely delivery of its services and competitive prices. Its strength lies in understanding the requirement of the client and its execution capabilities to provide the service as per the client requirements. This involves understanding the client requirements such as location, target audience, concept, ad design etc. and choosing the most appropriate media source which enables it to not only attract new customers but also leads to recurring business with its existing clients.

Customer Satisfaction: The company is maintaining mutually beneficial relationships with its customers by assisting clients in choosing the optimal advertisement hoarding locations in accordance with their budget and regional preference, art work creative of advertisement (through in-house team or third party), negotiating and ensuring display of requisite advertisement. In a zest to attain maximum customer satisfaction, it assures accurate and timely delivery of its services. Its strength lies in understanding the requirements of the customer and its execution capabilities which enables it to attract new customers.

Risks and concerns

Dependent upon few suppliers for procurement of outdoor hoardings: In the event of a delay, inadequacy or default in deliveries by any of the company’s vendors, it may not be able to source its hoardings on an adequate and timely basis or on commercially acceptable terms. A major disruption to the timely and adequate supplies of its outdoor hoardings could adversely affect its business, results of operations and financial condition. Any problems faced by its suppliers in their manufacturing facilities resulting in delays or non-adherence to quality requirements could adversely impact its ability to meet its customers’ requirements in time and its operations would be affected to the extent it is unable to line up supplies from alternate suppliers.

Requires significant amounts of working capital: The company intends to continue growing by expanding its business operations. This may result in increase in the quantum of its current assets. Its inability to maintain sufficient cash flow, credit facility and other sources of fund, in a timely manner, or at all, to meet the requirement of working capital could adversely affect its financial condition and result of its operations.

Operate in competitive environment: The industry in which the company operates is fairly competitive and its results of operations and financial condition are sensitive to, and may be materially adversely affected by competitive pricing and other factors. Competition may result in pricing pressures, reduced profit margins, lost market share or a failure to grow its market share, any of which could substantially harm its business and results of operations. The domestic segment which it caters to is fragmented and fairly competitive. It competes primarily on the basis of quality of its services, customer satisfaction and marketing. Thus, some of its competitors may have certain other advantages over it, including established track record, superior service offerings, larger portfolio of services, technology and greater market penetration, which may allow its competitors to better respond to market trends. They may also have the ability to spend more aggressively on marketing initiatives and may have more flexibility to respond to changing business and economic conditions than it does.

Outlook

Incorporated in 2005, Bright Outdoor Media is engaged in the business of providing advertising services offering advertising media services consisting of Out of Home (OOH) media services. The company's array of service hoardings includes Transfer stickers, Railway boards, Railway panels, Promos, full train, Bus panels, Full Bus painting, Toll Naka, Mobile sign trucks, Kiosks, Traffic Booths, Cinema slides, Gantry and Vinyl. Alongside Out-of-Home (OOH) Advertising and offering novel communication services to clients, the company also engages in offering services assuring multicultural and ethnic Outdoor Advertising campaigns that engage audiences and achieve impact, for every creative need, idea, and budget. The client domain of Bright Outdoor mainly revolves around corporate clients operating in various business fields viz. Insurance, Financial service providers, Entertainment Industries, Construction, Jewellery, Aviation, Education, Government Organizations, etc. On the concern side, any failure or defect in its services could result in a claim against it for damages, regardless of its responsibility for such a failure or defect. Besides, it requires certain statutory and regulatory permits, licenses and approvals to operate its business.

The company is coming out with a maiden IPO of 38,00,000 equity shares of Rs 10 each at a fixed price of Rs 146 per share to mobilize Rs 55.48 crore. On performance front, the company’s total income has increased by 104.01% from Rs 2494.88 lakh for FY 2020-21 to Rs 5089.71 lakh for FY 2021-22. Profit after tax increased by 139.50% from Rs 108.22 lakh for FY 2020-21 to Rs. 259.20 lakh for FY 2021-22. Meanwhile, the company base is spread majorly across Maharashtra. As a business strategy, it intends to widen its reach by increase its domestic presence which is currently untapped by it. The company aims to expand and diversify the services offered by way of adding LED hoardings in its inventory.