Maagh Advertising And Marketing Services coming with an IPO to raise upto Rs 9.12 crore

Maagh Advertising And Marketing Services

• Maagh Advertising And Marketing Services  is coming out with an initial public offering (IPO) of 1520000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 60 per equity share.
  
• The issue will open on September 26, 2022 and will close on September 29, 2022.
  
• The shares will be listed on SME Platform of BSE.
  
• The share is priced 6 times higher to its face value of Rs 10.
  
• Book running lead manager to the issue is Inventure Merchant Banker Services.
  
• Compliance Officer for the issue is Nidhi Jaiswal.
  

Profile of the company

The company is an advertising agency primary offering creative and media services. It creates and executes advertising campaigns across various media that help its clients business and brands grow. It offers a complete range of designing, media and printing services. The company’s strength is media buying where it understand the clients marketing objective and use the correct media to achieve that objective. It is able to understand the various media available and use the right mix of media and the right prices to the achieve the client’s media objectives. It also rely heavily on third parties like material suppliers, designers, media providers and other service providers to help it meet its contractual obligations and provide services as required by its client. It does not own any of the media and it do not keep inventory of any media on its own. It does media planning as per its clients requirements and timing of their requirements and accordingly proceed to buy media for its clients.

Proceed is being used for:

• Funding the cost of purchase of software.
  
• Purchase of media inventory.
  
• General corporate purposes.
  

Industry overview

The Indian advertising industry has evolved from being a small-scaled business to a full-fledged industry. The advertising industry is projected to be the second fastest growing advertising market in Asia after China. The Indian government has given tremendous support to the advertising and marketing industry. Advertising expenditure is likely to increase in the financial sector, driven by Reserve Bank of India (RBI) policies which could result in a more favourable business environment. Also, proposed licences for new banks and better market sentiments render the advertising and marketing industry in India a fertile space. Print contributes a significant portion to the total advertising revenue, accounting for almost 41.2 per cent, whereas TV contributes 38.2 per cent, and digital contributes 11 per cent of the total revenue. Outdoor, Radio and Cinema make up the balance 10 per cent.

The Indian Media and Entertainment (M&E) industry is a sunrise sector for the economy and is making significant strides. Proving its resilience to the world, Indian M&E industry is on the cusp of a strong phase of growth, backed by rising consumer demand and improving advertising revenue. According to a FICCI-EY report, the advertising to GDP ratio is expected to reach 0.4% by 2025 from 0.38% in 2019. According to the FICCI-EY report 2021, the media and entertainment business is estimated to grow 25% to reach Rs. 1.73 trillion ($23.29 billion) in 2021. According to an EY report, the Indian media and entertainment (M&E) sector stood at Rs. 1.38 trillion ($19 billion) in 2020 and is estimated at Rs. 1.73 trillion ($23.7 billion) in 2021. Further, it is projected to grow to Rs 2.23 trillion ($30.6 billion) by 2023 due to acceleration of digital adoption among users across geographies. Television would account for 40% of the Indian media market in 2024, followed by print media (13%), digital advertising (12%), cinema (9%), and the OTT and gaming industries (8%). The market is projected to increase at a CAGR of 17% between 2020 and 2023. In FY20, digital and online added revenue stood at Rs. 26 billion in the M&E sector and their contribution to the sector increased to 23% in 2020 from 16% in 2019.

Pros and strengths

Meeting expectation of clients: The company aims to generate results at pat with the expectation of its clients, through research, compelling creative works and strategic media planning. The company's long term relationships with its clients strives to measure success for its clients through increased brand awareness, impact on sales volume and other parameters mutually agreed with the clients.

Social media and digital advertising: The company’s strength lies in its social media and digital marketing. It develops digital brand strategies, communications, products and services that matter to target group of its clients by novelty, brand authenticity quality for higher brand awareness, engagement, sales and loyalty. It helps grow the brand awareness of its clients on Social Media by engaging with the target audience and develop lasting customer relations. It helps its clients in giving value, engaging, inspiring, and entertaining their target audience. Its SEO service ensures visibility of its clients so that their business to get noticed. It also increase public awareness and drive long-term brand loyalty with content marketing for its clients. It also undertakes content writing for website, email campaigns and social media channels.

Marketing Strategy: The company helps its clients find the right strategy to meet their goals in the corporate world by using the appropriate tools, models, research, and approach. It creates unique Brands that are memorable and captivating with a potential message or concept. It provide full printing solutions for your business from promotional items such as billboards, signages, business cards, flyers, brochures and other branding materials.

Risks and concerns

Dependent on digital marketing: The company is dependent on Digital Marketing as the major source of its revenue. Any decrease in ad-spend by its clients or a reduction in effective advertising rates, or the loss of clients due to its inability to attract new advertising customers could have a material adverse effect on its business, results of operations and financial condition. Further, the advertising revenue is also dependent on the quality of its services and preference of advertising clients for one media over another.

Operate in highly competitive industry: The segments of the advertising industry in which the company operate are subject to intense competition. Its principal competitors are other advertising agencies, including other major companies with well established business. It also competes against smaller agencies and other independent and local entities engaged in advertising business. If it is unable to compete successfully, its revenues or profits may decline or its ability to maintain or increase its market share may be diminished. It competes based primarily on brand name recognition and reputation, location, customer satisfaction, quality of service. Some of its competitors are larger than it is based on the finances, human resource or geographic locations where they operate.

Dependent upon few suppliers: The company’s top 5 suppliers represented 48.06% and 63.21%, respectively, of its operating expenses for Fiscal 2022 and Fiscal 2021 respectively. Any problems faced by its supplier resulting in delays or non-adherence to quality requirements could adversely impact its ability to meet its customer’s requirements in time and its operations would be affected to the extent it is unable to line up supplies from alternate suppliers. Although, it has a strong emphasis on quality, timely delivery and personal interaction by the senior management with the suppliers, any change in the preferences of suppliers can adversely affect the business and the profitability of the company.

Outlook

Maagh Advertising And Marketing Services is a advertising agency primary offering creative and media services. It creates and executes advertising campaigns across various media that help its clients business and brands grow. It offers a complete range of designing, media and printing services. Its strength is media buying where it understand the clients marketing objective and use the correct media to achieve that objective. It is able to understand the various media available and use the right mix of media and the right prices to achieve the client’s media objectives. The company creates unique Brands that are memorable and captivating with a potential message or concept. It provide full printing solutions for your business from promotional items such as billboards, signages, business cards, flyers, brochures and other branding materials.  On the concern side, the company is dependent on Digital Marketing as the major source of its revenue. Any decrease in ad-spend by its clients or a reduction in effective advertising rates, or the loss of clients due to its inability to attract new advertising customers could have a material adverse effect on its business, results of operations and financial condition. Besides, it operates in a technologically intensive environment, where it will be competing on a global scale for its services.

The company is coming out with a maiden IPO of 1520000 equity shares of Rs 10 each at a fixed price of Rs 60 per share to mobilize around Rs 9.12 crore. On performance front, the Revenue from operations for the FY 2022 is Rs 2179.90 lakh as compared to Rs 2455.42 lakh during the FY 2021 showing decrease of 11.22%. This decrease was due to decrease in revenue its subsidiary. Besides, the company’s Profit after Tax (PAT) decreased from Rs 72.21 lakh for the FY 2021 to Rs 52.58 lakh in FY 2022. Meanwhile, as part of growth and expansion strategy, it intends to invest in a Social Media Monitoring Software (SMMS) to widen the scope of services being offered by the company. This software is will be developed by a software company and will be a customized software as per its requirements.