Share Analysis – Quality, Valuation Zone, Price Trend & DeciZen Rating

Nimbus Communications was originally incorporated as ‘Nimbus Communications Private Limited’ on June 30, 1987 under the Companies Act as a private limited company with the RoC, Maharashtra. Their company became a deemed public company under Section 43A of the Companies Act and its name was consequently changed to ‘Nimbus Communications Limited’ with effect from July 1, 1994. The Company’s corporate identification number as allotted by the RoC is U99999MH1987PLC043940. In an extraordinary general meeting of the company held on January 4, 2000, the company’s shareholders passed a resolution converting the company from a deemed public company to a public company.

The current Promoters of the company are Harish Kanayalal Thawani, Shobha Harish Thawani and Paramount Corporation Limited. They own the global media rights for all international cricket matches organised by the BCCI in India until March 2014 and have licensed the broadcast rights with respect to such matches in India to Neo Sports Broadcast. In addition to the rights that they have acquired from the BCCI, they have acquired and managed certain rights with respect to other sports federations, including Bangladesh Cricket Board, Asian Cricket Council, Cricket Kenya and Singapore Cricket Association. They are one of the leading sports rights management companies engaged in the acquisition, management and marketing of commercial rights relating to cricket events globally. Their joint venture company, Neo Sports Broadcast, owns and operates two 24-hour channels, Neo Cricket and Neo Sports.

The company currently holds an indirect 48.94% shareholding in Neo Sports Broadcast through Zenith Sports Private Limited, their joint venture company with one of their Promoters, Paramount Corporation Limited (Paramount). They have the right of exercising the call option in accordance with the terms of the Zenith Agreement for an aggregate consideration of Rs 0.36 million to acquire the remaining shares of Zenith from Paramount for which they have received the requisite prior approval from FIPB on May 19, 2010.

They are also involved in the filmed entertainment business through distribution rights management, content generation and their home video rental business under their brand “Showtime Video”. Their other businesses include production of television content as well as creation and maintenance of online cricket-related content through their proprietary website www.cricketnirvana.com.

Key Business Segments:

Sports management: They are a full service sports rights management and marketing company and provide a complete range of “on-ground to on-air” solutions in sports. The sports rights management business consists of three key lines of activities: (i) commercial rights management (including sponsorship, media rights management and licensing, merchandising and hospitality); (ii) television production (including production of live feed and creation of packaged content); and (iii) owned events.

Broadcasting: Neo Sports Broadcast owns and operates two 24-hour sports channels, namely Neo Cricket and Neo Sports. These channels are broadcasted over cable and direct-to-home (DTH) platforms, and telecast cricket and international sports. Since its launch in October 2006, among the sports channel in India, Neo Cricket has achieved number one ranking in the half hour cumulative ratings for sport channel as per TAM viewership data for calendar years 2008, 2009 and for the period from January 1, 2010 to July 31, 2010. They also plan to launch two new 24 hours channels namely, Neo Cinema and Neo Zindagi. The applications dated August 11, 2010 for uplinking and downlinking licenses for these two new channels have been made with MIB, along with application for another channel the plans for which are at a very preliminary stage.

Filmed entertainment: They are a producer and distributor of film content in India. As of August 31, 2010, thave produced three and distributed 10 feature films. Their home production, “Ek Hoti Wadi”, a Marathi film, won the Sixth Maharashtra Cine-Natya Mahotsav Award in the year 2002. They have also commenced their home video rental business under the brand “Showtime Video” and currently operate four stores in Mumbai.

Milestones:

• 1988-1989 - They marketed air time for advertisements on Doordarshan for the television serials Nukkad, Wagle Ki Dunya and Sunil Gavaskar Presents.
• 1990 - They produced their first sports program called ‘Football Fever’ for the 1990 Football World Cup in Italy.
• 1993 - Production and marketing of the music-based entertainment television series ‘Superhit Muqabla’ on Doordarshan by them.
• 2002 - Nimbus Sport International Pte. Limited was appointed by Prasar Bharati Corporation Limited as the exclusive television production company to produce live television feed for international cricket played in India from 2002-2004.
• 2002 - Nimbus Sport International Pte. Limited was appointed by Global Cricket Corporation Pte. Limited as the marketing agents of Global Cricket Corporation Pte. Limited for the media and sponsorship rights for ICC events from 2002 to 2007.
• 2005 - Nimbus Sport International Pte. Limited acquired title sponsorship, co-sponsorship and in-stadia advertisement rights in Pakistan from the Pakistan Cricket Board for certain international matches in Pakistan for the period January 2006 to March 2008.
• 2006 - The company acquired exclusive worldwide media rights, including broadcast on television as well as on radio, for the period March 2006 to March 2010, for all international matches and series organised by the BCCI in India, including 72 days of domestic cricket matches.
• 2006 - Their subsidiary, Nimbus Sports International Pte. Limited, by virtue of its agreement with the BCCI has acquired rights in India to produce the live feed for television for matches played in India, until March 2010.
• 2006 - Neo Sports Broadcast launched the channels Neo Sports and Neo Sports + which has been renamed as Neo Sports and Neo Cricket respectively on April 30, 2008.
• 2006 - Nimbus Sport International Pte. Limited was appointed as the exclusive worldwide media rights marketing company (excluding television and radio rights in Bangladesh) for television, radio and internet broadband from the BCB for all cricket matches organised by the BCB in Bangladesh in the period November 2006 to March 2012.
• 2006 - Nimbus Sport International Pte. Limited was also made in charge of the television production for all cricket matches organised by the BCB in Bangladesh in the period November 2006 to March 2012.
• 2008 - Launched internet operations through www.cricketnirvana.com.
• 2009 - The company acquired exclusive worldwide media rights, including broadcast on television as well as on radio, for the period April 2010 to March 2014, for all international matches and series organised by the BCCI in India, including 78 days of domestic cricket matches.
• 2010 - The company acquired all commercial rights for three editions of the quadrangular Asia Cup to be held between the national teams of India, Pakistan, Sri Lanka and Bangladesh in the years 2010, 2012 and 2014.

Subsidiaries:

Indian Subsidiaries -

Nimbus Home Entertainment - Nimbus Home Entertainment (Nimbus Home) was incorporated on November 22, 2002 in the name and style of Nirvana Music Private Limited under the Companies Act. The name of the company was changed from Nirvana Music Private Limited to Nimbus Home Entertainment Private Limited on August 30, 2007. Its main object is to undertake the business of audio, video and multimedia transmissions on radio channels and other channels on the internet, setting up broadcasting stations and broadcast through cable, wireless and satellite and to deal in cinematographic films and other visual media for viewing through the internet, physical delivery, mobile phones and other transmission devices and to deal in entertainment related products of all kinds in relation to films, sports, concerts and events.

Nimbus Motion Pictures (AP) - Nimbus Motion Pictures (AP) (Nimbus Motion) was incorporated on October 30, 2002 under the Companies Act. Its main object is to carry on the business of motion pictures, audio, video, internet and multimedia including management, production, distribution, transmission, marketing, event and celebrity management, merchandising of stars and celebrity memorabilia, acquisition of cinematographic films, motion pictures, teleserials, documentaries and tele-dramas.

Nirvana Television - Nirvana Television (Nirvana Television) was incorporated on October 27, 1997 as ‘Nimbus Broadcast’. With effect from September 24, 1998, the name of the company was changed to ‘Nimbus Online’. With effect from January 10, 2000 it became a deemed public company under Section 43A of the Companies Act, consequent to which the word ‘Private’ was deleted from its name, to become ‘Nimbus Online’. With effect from September 26, 2003, the company’s name was changed to ‘Nirvana Television’. Its main object is producing, distributing, broadcasting and narrow casting television and radio programmes, motion pictures and multimedia products; to offer satellite uplinking and downlinking services; to offer broadcasting channels and own; and operate television stations, radio stations and other broadcasting equipment.

Foreign Subsidiaries -

Nimbus Communications BVI - Nimbus Communications BVI was incorporated on October 7, 2004 in the British Virgin Islands under the International Business Companies Act, Cap. 291 and was re-registered under the BVI Business Companies Act, 2004 in the British Virgin Islands as a BVI Business Company on January 1, 2007. Its object is to engage in any act or activity that is not prohibited under the law for the time being in force in the British Virgin Islands.

Nimbus Communications Worldwide - Nimbus Communications Worldwide was incorporated on September 6, 2000 under the laws of Republic of Mauritius. Its main object is to carry on business as an investment holding company to acquire telecasting/broadcasting/media rights of various cricket matches.

Nimbus Media - Nimbus Media was incorporated on September 15, 2004 under the laws of Republic of Singapore. Its main objects are television programme production and wholesale trading.

Nimbus Sport International - Nimbus Sport International was incorporated on March 21, 2000 as “Rebeiro” under the laws of Republic of Singapore. Its name was changed to “WSG Nimbus” in September 2000; to “World Sport Nimbus” in December, 2001 and to its present name, “Nimbus Sport International” in July 2005. It was established with the main object of engaging in the business of television programme production and whole sale trading.