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6 October 2023

Basilic Fly Studio IPO: Visual Effects Taking Flight

Introduction:

Basilic Fly Studio Limited, founded in 2016, is a Chennai-based visual effects (VFX) studio with international operations in Canada and the UK. Specializing in VFX solutions for movies, TV shows, web series, and commercials, the company has earned a reputation for excellence. Their services encompass final compositing, roto-scopy, camera and body tracking, paint and preparation, previsualization, computer graphics, and on-set supervision.

IPO Snapshot:

The Basilic Fly Studio IPO, a book-built issue, was valued at ₹66.35 crores, comprising a fresh issue of 62.4 lakh shares worth ₹60.53 crores and an offer for sale of 6 lakh shares totaling ₹5.82 crores. The IPO bidding period commenced on September 1, 2023, and concluded on September 5, 2023. Allotment was finalized on September 11, 2023, with the shares listed on the NSE SME on the same day. The IPO had a price band of ₹92 to ₹97 per share, with a minimum lot size of 1200 shares, requiring a minimum investment of ₹116,400 for retail investors. High Net Worth Individuals (HNIs) were expected to apply for a minimum of 2 lots (2,400 shares), amounting to ₹232,800.

Key Players:

GYR Capital Advisors Private Limited served as the book running lead manager of the Basilic Fly Studio IPO, while Purva Sharegistry India Pvt Ltd acted as the registrar for the issue. Share India Securities played the role of the market maker for the IPO.

Stock Performance:

As of September 27, 2023, Basilic Fly Studio Limited's stock (Arrow) was trading at ₹297.15, reflecting a 3.86% increase. The stock opened at ₹292.00, reached a high of ₹313.00, touched a low of ₹278.15, and had a previous closing price of ₹286.10. The total traded value amounted to 2,04,000 shares.

Ownership Structure:

Pre-issue shareholding stood at 85.42%, and post-issue, it was 23.24%.

Financial Performance:

Basilic Fly Studio has demonstrated impressive financial growth. As of March 31, 2023, the company's assets were valued at ₹5,315.33 lakhs, with revenue amounting to ₹7,895.15 lakhs. Profits after tax reached ₹2,774.02 lakhs, and the net worth of the company stood at ₹3,166.98 lakhs, with reserves and surplus of ₹1,466.98 lakhs. The total borrowing as of that date was ₹427.08 lakhs.

Performance Indicators:

Key performance indicators for the Basilic Fly Studio IPO included a post-issue P/E (Price-to-Earnings) ratio of 8.08 and a Market Capitalization of ₹225.43 crores.

Objectives of the Issue:

The net proceeds from the IPO were allocated for the following purposes:

1. Expenditure for setting up a studio/facility at Hyderabad and Salem.
2. Investment in infrastructure enhancement for existing facilities/offices in Chennai and Pune.
3. Investment in subsidiaries for workspace expansion, including new office space in London and strengthening existing facilities in Vancouver.
4. General corporate purposes and issue expenses.

Expert Opinion:

Observed that Basilic Fly Studio Limited has achieved mastery in the field of VFX studios and has expanded globally, carving a niche for itself. The company's stellar performance in FY23, fueled by timely expansion, positions it for promising prospects ahead. He recommended that investors consider this opportunity for short to long-term rewards.

Subscription Status:

The Basilic Fly Studio IPO garnered significant interest, with a subscription rate of 358.60 times as of September 5, 2023. Retail investors exhibited strong participation with a subscription rate of 415.22 times. The Qualified Institutional Buyers (QIB) category saw robust demand, while the Non-Institutional Investors (NII) category displayed remarkable interest with a subscription rate of 549.44 times.

Conclusion:

Basilic Fly Studio Limited specializes in delivering top-notch VFX solutions for a wide range of media content. With its strong financial performance and promising expansion plans, the IPO opens doors for investors looking to tap into the potential of the visual effects industry. However, as with any investment, due diligence is paramount, and investors should carefully assess their investment horizon and risk tolerance.

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