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ETC Networks gains on pref issue hopes

Latha Venkatraman

MUMBAI, Feb. 14

ETC Networks Ltd, a relatively unknown media company, has been witnessing a steady gain in its share price on indications that the company is on course to make a preferential allotment.

The company was in the final stages of discussions for making preferential allotment for an aggregate amount of Rs 20 crore, sources said, adding that the company was in talks with three media companies. A decision is due to be made shortly.

Shares of ETC Networks moved up 40 per cent during this week on the Bombay Stock Exchange (BSE) to Rs 32.90 from its Friday's closing of Rs 23.45. On Thursday, the share touched a high of Rs 37 before finishing at Rs 32.25 with 4.49 lakh shares traded on the bourse.

The company has an equity base of Rs 11.69 crore, with promoters holding 48.42 per cent, FIIs/NRI holding 10.46 per cent, financial institutions and mutual funds holding 8.81 per cent, corporate bodies 22.33 per cent and public the rest.

Market sources indicated that the preferential allotment is likely to be made in the price range of Rs 35-33. The proceeds of the allotment were likely to be used to expand ETC's business overseas, sources said.

ETC is expected to end the current fiscal on a profitable note. For the year ended March 2001, ETC had a profit after tax of Rs 2.43 crore on a turnover of Rs 53.82 crore. For the nine-month period ending December 31, 2001, ETC had reported a fall in net profit at Rs 1.62 crore (Rs 4.30 crore) on total income of Rs 23.30 crore (Rs 32.60 crore).

Company officials had earlier indicated that ETC's advertising revenues were edging up, facilitated by an increase in rates as well as volume.

ETC Networks, which has two channels — ETC Music and ETC Punjabi — had entered into a tie-up with TV Asia, a 24-hour Hindi channel in the US, to provide content. The deal involves ETC providing two hours of Gurbani music to this channel.

ETC Punjabi has an agreement with Shiromani Gurudwara Prabandhak Committee (SGPC) for exclusive live telecast of Gurbani Kirtan from Harmandir Sahib, Amritsar, for a period of 11 years. The Gurbani programming is considered the channel's main strength. ETC has targeted an overseas subscriber base of 3,00,000 in the next two years, bringing a revenue of $5 per subscriber every month.

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