Maxposure
- Maxposure is coming out with initial public offering (IPO) of 61,40,000 shares of Rs 10 each in a price band Rs 31-33 per equity share.
- The issue will open on January 15, 2024 and will close on January 17, 2024.
- The shares will be listed on NSE Emerge Platform.
- The face value of the share is Rs 10 and is priced 3.10 times of its face value on the lower side and 3.30 times on the higher side.
- Book running lead manager to the issue is GYR Capital Advisor.
- Compliance Officer for the issue is Sakshi Mishra.
Profile of the company
Maxposure is a diverse new-age media and entertainment company offering 360-degree services across multiple distribution platforms. Specialising in customised solutions, the house of Maxposure stands on four pillars: Inflight Entertainment, Content Marketing, Technology and Advertising. Providing one-stop solutions for all inflight entertainment needs of an airline as per the latest market trends to enhance customer experience on board. It specializes in curating, sourcing, licensing and adapting content; tailor made for any airline as per its norms and requirement in-flight entertainment systems. The company has a longstanding working relationship with major content owners, studios and production houses of the world along with leading original equipment manufacturers of airlines. The Mumbai-based lab facility of Company provides an array of services, including custom edits, metadata creation, duplication, audio enhancement to encoding/transcoding in any format for any system and post-production services (like vpas, prams, boarding music, safety/boarding video).
With content at its heart, the company builds creative stories around brands to enhance their ROI. Working across online and offline platforms, the company’s expertise includes strategizing, building compelling conversations to increase a brand’s influence and reach the desired target audience. It has created and managed successful digital campaigns for various brands (private and government) and worked with large budgets to drive the best reach and engagement for its clients. In its efforts to increasing market size for its Inflight Entertainment business & enhancing its offerings to its content marketing clients, the company has invested in developing two technology products: AeroHub & Smart Trip Planner.
Further, the company’s advertising services enables its clients to monetize their marketing collaterals and generate revenues and acts as a differentiator compared to other players in respective markets. It has its own sales team in 6 major cities in India and works with advertising reps in major hubs (Singapore, Dubai, London, Paris, New York, Chicago) around the world. The company is one of the few marketing and communication companies to have successfully transitioned from print to digital media marketing segment and to have expanded its services across all verticals of aviation, travel, government and hospitality industries. The company through its long-standing experience and award-winning services has been able to diversify its offerings to include a wide spectrum of in-flight experiences, ranging from curated entertainment on IFE systems, on-board communication through hi-tech patented solutions, innovative inflight magazines, sampling on board, and strategic ambient advertising. Moreover, the company also offers strategic and innovative advertisement platforms to an advertiser to target a flyer at every step of the journey starting from pre-boarding, on-board, and post-boarding. Generally, in order to stream content on-board, the airplane needs to have an in-built entertainment system, in which content can be fed and streamed. However, in order to cater to low-budget airlines, the company has devised a hardware solution, called ‘AeroHub’, through which content can be streamed wirelessly on the personal devises of the passengers in a cost effective manner.
Proceed is being used for:
- Funding of expenses proposed to be incurred towards obtaining various certifications from the Federal Aviation Administration (FAA) and the European Union Aviation Safety Agency (EASA) for Wireless Streaming Server (AeroHub) and Patented Inviseo tray table.
- Funding working capital requirements of the company for manufacturing the Proposed Products and the working capital requirements of the company in the ordinary course of business.
- Prepayment or repayment of all or a portion of certain outstanding borrowings availed by the company.
- General corporate purposes.
Industry overview
The global in-flight entertainment & connectivity market is projected to grow from $7.48 billion in 2023 to $21.03 billion by 2030, at a CAGR of 15.9%. Technological advancements in terms of wireless connectivity have enabled passengers to use personal electronic devices in airlines, consequently driving the growth of the industry. The ever-increasing customers’ need for bug-free connectivity onboard is one of the important factors driving the growth. In-flight entertainment and connectivity (IFEC) systems play an important role in delivering customers onboard wireless connectivity solutions and services. The increase in passenger traffic will eventually drive the new aircraft procurements, creating the demand for the aircraft IFES market. In 2021, the air passenger traffic in North America, Europe, Asia-Pacific, and the Middle East recorded 4.3 billion, which is a growth of 167% compared to 2020, and compared to 2019, the growth was 5%. The major region that accounted for most air passenger traffic is Asia-Pacific, which accounted for 41%, followed by North America at 27%, Europe at 24%, and the Middle East accounted for 7%. Since Asia-Pacific recorded the highest air passenger traffic, it will generate the demand for new aircraft compared to other regions.
Meanwhile, Content marketing is a marketing strategy used to attract, engage, and retain an audience by creating, publishing and distributing relevant articles, videos, blogs, newsletters, magazines, social media posts, and other media. This approach establishes expertise, promotes brand awareness, and keeps business goals top of mind. Content marketing is a type of inbound marketing that attracts customers and builds loyalty, making it effective for customer retention. A content marketing strategy establishes brand as a thought leader, boosting trust among the audience by creating and distributing content in various ways across platforms in an omni-channel approach. The content marketing market size is estimated at $263.09 billion in the current year. It is expected to reach $523.45 billion in the next five years, registering a CAGR of 14.75% during the forecast period. One key trend that is propelling the growth in content marketing demand is digital transformation. Content marketing has become a vital tool to efficiently connect with and engage internet users as enterprises shift their business focus from traditional channels into digital platforms, such as marketing strategies and client involvement efforts.
Further, The Indian advertising market size reached Rs 743.0 Billion in 2022. Looking forward, IMARC Group expects the market to reach Rs 1,412.5 Billion by 2028, exhibiting a growth rate (CAGR) of 11.2% during 2023-2028. The growing adoption of advertising to enhance brand awareness, increasing number of media and entertainment models, and rising demand for digital advertising solutions represent some of the key factors driving the market. Rapid urbanization and economic growth of India are encouraging businesses to increase investments in aggressive marketing strategies, promotional activities, innovative packaging solutions, and celebrity endorsements. In addition, the rising focus of companies on improving customer retention and attracting new buyers represents one of the key factors positively influencing the market. Apart from this, the growing adoption of digital advertising solutions due to the increasing penetration of high-speed internet connectivity in India is creating a positive market outlook.
Pros and strengths
Fully integrated service portfolio offering result-oriented solutions: The company is a fully integrated marketing and communications agency offering diverse solutions across media, entertainment, technology and advertising verticals. It offers a bouquet of specialized services, including but not limited to, in-flight media solutions, content and digital marketing, brand building, video production and shoots, mobile application, website development, social media marketing, print, technology and advertising solutions on online and offline platforms.
Wide-spread domestic and international market presence: With the help of its long-standing market presence and integrated business model it has been able to create a wide spread domestic and international market presence of the company, thereby catering to various customers functioning in various industries. In addition to multiple industries, it offers its services across multiple geographies, as well. The company has a vast sales network pan India and has also established offices in Delhi, Mumbai, Bengaluru and Kolkata. For its digital projects it also has employees, hired locally, who are stationed in offices of its clients, in Bhopal and Chennai. The local talent understands the regional insights and sentiments and results in offering tailored services to its clients.
Diverse customer base spread across various industries: Owing to its diverse service portfolio, its customer base is also diversified and spread across various geographies and platforms. The company’s innovative and diverse service portfolio and result oriented strategies have aided in curating an industrywide client portfolio across various geographies. Its end-to-end solutions and integrated service portfolio has enabled it in successfully inculcating a horizontal marketing approach in its business operations. The company’s consistent efforts and specialised services have helped it in achieving a mix of private and government clientele spread across inter alia, tourism, automobile, hospitality, aviation, lifestyle, fashion, real estate and banking industries.
Risks and concerns
Dependency on a few customers of its services in some of its business lines: The company is engaged in offering media, entertainment and marketing solutions under the Inflight Entertainment, Content Marketing, Technology and Advertising segments. Its business operations are highly dependent on its customers, and the loss of any of its customers from any industry which it caters to may adversely affect its sales and consequently on its business and results of operations. Although, it has entered into formal agreements with a majority of its customers, however it cannot assure that either of the parties will not terminate such agreement or breach any covenant of such agreements. Periodically, it may have to discontinue business with certain customers, for reasons including delay in payments, among others. Its ability to terminate its arrangements with certain customers may be limited by the terms of its agreements with them. Further, neither do the company has any exclusive agents, dealers, distributors nor has it entered into any agreements with any of the market intermediaries for selling or marketing its services. If there occurs any change in the market conditions, requirements of its customers, or if it fails to identify and understand evolving industry trends, preferences or fail to meet its customers’ demands, it might have a direct impact on its revenue and customer base. The inability to procure new orders on a regular basis or at all may adversely affect its business, revenues, cash flows and operations.
Limited operation history in certain geographical areas: The company is engaged in offering media, entertainment and marketing solutions under the inflight entertainment, content marketing, technology and advertising segments. As part of its growth strategy, the company intends to expand its global footprint. It currently provides its services in India and the Middle East, and plan to expand its operations globally. It plans on expanding its operations in countries/ regions such as, Africa and further into the Indian Subcontinent. Furthermore, the company intends to offer its proposed products, AeroHub and Patented Inviseo tray table to various airlines functioning in Indian and foreign jurisdictions. The company’s investments in its proposed products and services will serve to improve and expand its operations, the products and services that it offers and propose to offer to its customers and enable it to globally expand its customer base and market outreach. The company’s limited operating history in international markets and evolving business could make it difficult to evaluate its future prospects and the risks and challenges it may encounter.
High working capital requirement: The company’s business requires a significant amount of working capital. In the event, it is unable to source the required amount of working capital for addressing an increased demand of its services, it might not be able to efficiently satisfy the demand of its customers. Even if it is able to source the required amount of funds, it cannot assure that such funds would be sufficient to meet its cost estimates and that any increase in the expenses will not affect the price of its services. Further, one of the objects of this Issue include funding of working capital requirements of the company, which is based on management estimates and certain assumptions. The company’s working capital requirements may be subject to change due to factors beyond its control including force majeure conditions, an increase in defaults by its customers, non-availability of funding from banks or financial institutions. Accordingly, such working capital requirements may not be indicative of the actual requirements of the company in the future and investors are advised to not place undue reliance on such estimates of future working capital requirements.
Outlook
Maxposure is a company that provides personalized media and entertainment services cross various platforms. They specialize in Inflight Entertainment, Content Marketing, Technology, and Advertising. The Mumbai-based lab facility of the company offers a range of services, including custom editing, metadata creation, duplication, audio enhancement, encoding/transcoding in any format for any system, and post-production services. The company has a wide sales network across India and has established offices in Delhi, Mumbai, Bengaluru, and Kolkata. It has also successfully launched and managed projects outside India, particularly in the Indian subcontinent and the Middle East. These projects include Gulf Air (Kingdom of Bahrain), Air Arabia (Sharjah), VFS (UAE), Jazeera Airways (Kuwait), among other. On the concern side, the company is dependent on a few customers of its services in some of its business lines, for a significant portion of its revenue, and any decrease in revenues or sales from any one of its key customers may adversely affect its business and results of operations.
The company is coming out with an IPO of 61,40,000 equity shares of face value of Rs 10 each. The issue has been offered in a price band of Rs 31-33 per equity share. The aggregate size of the offer is around Rs 19.03 crore to Rs 20.26 crore based on lower and upper price band respectively. On performance front, the total income of the company for fiscal year 2023 was Rs 3,355.55 lakh against Rs 3,321.31 lakh total income for Fiscal year 2022. This increase was due to the increase in other income. Moreover, Profit after tax for the Fiscal 2023 was at Rs 441.21 lakh against profit after tax of Rs 34.96 lakh in fiscal 2022, a 1162.04% increase. This was due to increase was due to achievement of better margins in operations as the company and changing revenue mix.
The company specializes in offering services towards in-flight entertainment needs of various airlines as per the latest market trends to enhance customer experience on board. The company specializes in curating, sourcing, licensing and adapting content which is tailor made for any airline as per their norms and requirement in print, audio and video. It intends to diversify the content offered by it on board, by sourcing and licensing diverse original and acquired films and television shows from various genres, in multiple languages. It also intends to build long term relationships with renowned content owners, studios and productions houses all over the world, in order to acquire licensing rights over movies, TV shows and audio of multiple genres and languages, Games, Podcasts, Destination videos, guides, etc., for new airline clients.
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