Brandbucket Media & Technology
Brandbucket Media & Technology is coming out with an initial public offering (IPO) of 1500000 Equity Shares of face value of Rs 10 each for cash at a fixed price of Rs 55 per equity share.
The issue will open for subscription on December 20, 2021 and will close on December 23, 2021.
The shares will be listed on SME Platform of BSE.
The share is priced 5.50 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 Sebi Goyal.
Profile of the company
The company is engaged in providing advertising and related media services. Its advertising media solutions include both offline like outdoor as well as digital media through Websites, Social Media Platforms, & Search Engines. The company’s primary advertising offerings include Digital marketing; Ground events/activations; Events Management; Marketing Technology Services Outdoor Media (OOH); and Print Media. The company’s outdoor media operations are spread across Mumbai & Thane. It helps its clients run a focused campaign in consumer populated areas. The company is also engaged in Events Management which includes planning, organizing and managing events. It also manages commercial events, corporate events, cultural events and also small brand promotion events for its clients. Its brand activation services include mall activations, consumer contact programs and roadshows.
The company also provides technology services enabling social media strategies and implementation for its clients through innovation and creativity. Its expertise with the technologies, applications, standards, regulations and compliances with respect to media and technology industry are relevant in each domain, quality of service & its resource base, enables it to offer a value proposition to its clients. It is focused on cost effective and impactful solutions tailor-made as per its client needs, so that its clients get necessary reach and frequency to further propel their business.
Proceed is being used for:
Augmenting additional working capital requirements.
Funding capital expenditure requirements.
General corporate purposes.
Industry overview
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. The Indian gaming industry stood at $930 million in 2020 and is expected to reach $3.8 billion by 2024. The online gaming market in India is projected to reach Rs 155 billion ($2.12 billion) by 2023, from Rs. 76 billion ($1.08 billion) in 2020, due to rapid increase in consumption. The music industry is expected to reach Rs. 23 billion ($330 million) by 2023, from Rs. 15 billion ($210 million) in 2020 at a CAGR of 15% between 2020 and 2023. According to a study conducted by Kantar and VTION, an audience measurement and analytics company, Gaana, the streaming service owned by Times Internet Ltd., had 30% market share, followed by JioSaavn (24%), Wynk Music (15%), Spotify (15%), Google Play Music (10%), and others (6%) in 2020.
Growth of the sector is attributable to the trend of platform such as YouTube that continues to offer recent and video content-linked music for free, which is expected to drive the paid OTT music sector reaching 5 million end-users by 2023, generating revenue of Rs. 2 billion ($27 million). The Telecom Regulatory Authority of India (TRAI) is set to approach the Ministry of Information and Broadcasting, Government of India, with a request to Fastrack the recommendations on broadcasting, in an attempt to boost reforms in the broadcasting sector. The Government of India has agreed to set up National Centre of Excellence for Animation, Gaming, Visual Effects and Comics industry in Mumbai. The Indian and Canadian Government have signed an audiovisual co-production deal to enable producers from both the countries exchange and explore their culture and creativity, respectively. In June 2021, the Union Ministry of Information and Broadcasting notified the Cable Television Network (Amendment) Rules, 2021, which aims to establish a three-layer statutory mechanism for citizens to raise grievances with respect to broadcasted content.
Pros and strengths
Outdoor media: The company’s primary strength lies in outdoor media. Over the last few years it has strengthen its expertise in this domain. The save company’s clients time, effort and money while handling their requirements for out of home advertising. In this segment, it works with both large and small corporates and ensure audience connection for its clients.
Client focus: The company is a client focused company. It intends to offer end to end marketing solution catering to its clients requirements. Its range of service and product offerings help its clients achieve their business objectives and enable it to obtain additional business from existing clients. The company is dedicated towards quality of its services and it adhere to quality standards as prescribed by its clients.
Multiple media options: The company offers various products such as Digital marketing; Ground events/activations; Events Management; Marketing Technology Services; Outdoor Media (OOH); and Print Media; Outdoor Media (OOH), Print Media, Ground events/activations, Events Management and Digital marketing. Further, it has also commenced services such as SEOs and social media marketing to further strengthen its engagement with the existing clients and also to get new clients. Its services are aimed at propelling the brand and business of its clients ahead. It provides its clients with access to a variety of unmissable out-of-home advertising options. Hence it is getting continuous business from many of its existing clients.
Risks and concerns
Do not have any long-term contracts with clients: The company does not have any long-term contracts with its clients and any change in the business pattern of its existing clients could adversely affect the business of the Company. As a result, its customers can terminate their relationships with it due to a change in preference or any other reason on immediate basis, which could materially and adversely impact its business. Consequently, its revenue may be subject to variability because of fluctuations in demand for its products and services. The company's customers have no obligation to work with it and may either cancel, reduce, or delay the business. The business by the Company's customers are dependent on factors such as the customer satisfaction with the level of service that the Company provides, fluctuation in demand for its Company's products, customer’s inventory management ,amongst others. Although it has satisfactory business relations with its clients and has received continued business from them in the past, there is no certainty that the same will continue in the years to come and may affect its profitability.
Rely on third parties for providing services: The company’s offering of services includes Digital marketing, Ground events/activations, Events Management, Outdoor Media (OOH), Print Media, etc. It does not own any of the media and it does not keep inventory of any media on its own. It plans to buy media for its clients as per the timing of their requirements. It book or buy the media from its various vendors. Further it also take services of and are dependent on third party designers, campaign management companies and other media suppliers for delivery of efficient services to its clients. Its operating expenses include the purchase of third party services and purchase of media and material required. The operating expenses accounted for 92.03%, 94.84%, 96.22% and 95.12% of total expenses for the 5 months period ended August 31, 2021 and Fiscals 2021, 2020 and 2019 respectively. If the company is not able to obtain the media at all or obtain the media in cost effective manner could have an adverse effect on its income and profitability.
Face intense competition: The company faces significant competition from other manufacturers and traders. In particular, it compete with other marketing agencies operating in the markets in which it is present. Its competitors may have advantages over it, including, but not limited to substantially greater financial resources; Longer operating history than in certain of its businesses; Greater brand recognition among consumers; Larger customer bases in and outside India; or More diversified operations which allow profits from certain operations to support others with lower profitability. These competitive pressures may affect the company’s business, and its growth will largely depend on its ability to respond in an effective and timely manner to these competitive pressures.
Outlook
Brandbucket Media & Technology offers online and offline advertising media solution services to customers. Its offerings include digital marketing, ground events, event management, marketing technology services, outdoor media, and print media. Its outdoor media operations are spread across Thane & Mumbai. The business is further engaged in event management activities including planning, organizing, and managing all event activities. Its expertise with the technologies, applications, standards, regulations and compliances with respect to media and technology industry are relevant in each domain, quality of service & its resource base, enables it to offer a value proposition to its clients. It is focused on cost effective and impactful solutions tailor-made as per its client needs, so that its clients get necessary reach and frequency to further propel their business. On the concern side, the company’s business operations require it to obtain and renew from time to time, certain approvals, licenses, registrations and permits, some of which may expire and for which it may has to make an application for obtaining the approval or its renewal. Besides, 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.
The company is coming out with a maiden IPO of 1500000 equity shares of Rs 10 each at a fixed price of Rs 55 per equity share to mobilize Rs 8.25 crore. On the performance front, revenue from operations for the FY 2021 is Rs 1519.27 lakh as compared to Rs 2288.21 lakh during the FY 2020 showing decrease of 33.60%. This decrease was primarily due to Covid-19 impact on its business. Profit after Tax and restatement adjustment (PAT) decreased from Rs 35.36 lakh for the FY 2020 to Rs 29.14 lakh in FY 2021. The company’s strategy is to increase the number of client relationships and then leverage those client relationships into offering in a whole suite of media products. During downturn of the markets, increased number of client relationships will add stability to its earnings. As a part of this it also plans to strengthen its sales team to bring in new client relationships to leverage its existing group offerings. Besides, the company proposes to purchase Bespoke advertising software to serve its clients better and realise better client services and minimise cost. The software will be a Bespoke, custom developed as per its requirements, using its experience of client interaction for last several years.
