Euro Multivision Limited – IPO

Business of Euro Multivision Limited


Euro Mutlivision is the second largest company in India which manufactures CDs and DVDs. The company was incorporated in April 2004 and commenced production in April 2005 with five manufacturing lines and a capacity of 720 lakh units of CDs and 72 lakh units of DVDs. Currently the company has expanded by adding five more production lines and has capacity of 1800 lakhs CDs.  
Euro Multivision now proposes to enter a new business which is manufacturing solar cells for electricity generation. The company plans to build a photovoltaic solar cell manufacturing unit with a capacity of 40 MW per year at a total cost of Rs.16756 lakhs in Kutch District in Gujarat. The proceeds from the IPO will go towards this project. The manufacturing unit is proposed to be set in a SEZ and as such would qualify from all the exemptions that are available for a SEZ.  


Financials of Euro Multivision


Since the company commenced its commercial operations recently there is not a lot of financial history to go by with, the total income for fiscal 2006 was Rs. 4476.45 lakhs and for fiscal 2007 it was Rs.5914.47 lakhs. The profit after tax for these two years was a loss of Rs. 128.69 lakhs and Rs. 619.07 lakhs respectively. The EPS for the fiscal 2007 was Rs.7.30 and for the year before that was a loss of Rs.1.58 per share.


Key Risks


Euro Multivision is entering a completely new line of business in which it has no prior experience and would face stiff competition from existing and new players in the business.

For setting up the proposed manufacturing plant the company has bought agricultural land and has applied for the conversion of this agricultural land to industrial land which has not yet been approved.

For the expansion into this new line of business Euro Multivision is totally dependent on the success of this IPO and in a situation where the IPO does not yield the funds for the project, right now there are no alternate source of funds identified.


The company has made a loss in one out of its two years of operations, which was fiscal 2006 where the company incurred a loss of Rs. 128.69 lakhs.

Leave a Reply

Your email address will not be published. Required fields are marked *