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BACKGROUND

Incorporated in 2008, Amagi Media Labs (“Amagi”) is a “SaaS” company that connects media companies to their audiences through cloud-native technology. Their platform helps content providers and distributors upload and deliver video over the internet (known as streaming) through smart televisions, smartphones, and applications, instead of traditional cable or set-top box services. They also help monetize such content through targeted advertising services for advertisers. Their technology has enabled the streaming of marquee events, such as the 2024 Paris Olympics, UEFA football tournaments, Oscars and the U.S. Presidential debates.

Objects and Details of the Issue -

Issue is a combination of fresh issue of 2.26 cr shares aggregating to Rs 816 cr and offer for sale of 2.69 cr shares aggregating to Rs 973 cr totaling to Rs. 1789cr. Co plans to utilize the IPO proceeds for Investment in technology and cloud infrastructure of Rs. 550 cr.

Investment Rationale –

1. Evolving M&E Industry offers immense opportunities.

2. End to End Solutions Provider for Media Companies with Competitive Edge.

3. Sticky Customers – Opportunity for Scale and Growth.

4. Improving Financials.

Risks to Recommendation –

1. Technical Complexity in Cloud distribution and video streaming;

2. Ability to cross-sell and Upsell is very complex;

3. Intense Competition and Market Saturation;

4. Privacy and Security for Content Owners.

Valuation and Recommendation -

Amagi is a prominent SaaS player in the Media and Entertainment Industry offering cloud technology to the content providers and technology. Company is instrumental in reducing costs for their clients by almost 30-50% and thus the industry is fast adopting the new technology (penetration is still low at only 10%). The stickiness of the customers along with cross sell and upscale opportunities leaves immense scope for the company to continue its revenue Cagr growth of 30% in the coming years as well. It has turned Pat positive in H1FY26 and we believe it can thrive well in the growing demand environment. Issue is priced at 5x its FY26A EV/Sales and we recommend ‘Subscribe’ to the issue.

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