Srinivasan K Swamy on how the IPO will fortify RK Swamy’s operations

RK Swamy Limited, a prominent player in the media and advertising industry, yesterday (February 28, 2024) announced its decision to launch an Initial Public Offering (IPO). The Bid/ Offer will open on Monday, March 4, 2024 and close on Wednesday, March 6, 2024. The Anchor Investor Bidding date shall be Friday, March 1, 2024. The move is strategically timed, and according to Srinivasan K Swamy, Chairman and Managing Director, RK Swamy, there are four key reasons behind this significant financial step. He also provides insights about the IPO funds, Digital Studio Expansion, Technological Upgradation, and more.

Digital Studio Expansion:

“One important reason is to get ready for tomorrow. We actually have four different reasons why we’re raising money. One is, of course, a digital studio that we are putting out. It is going to be an important requirement because we are doing content at scale,” shares Swamy.

In response to the growing demand for digital content, RK Swamy aims to establish its digital media studio. With an impressive track record of producing 2,800 videos last year, the company anticipates a significant increase in content creation and recognises the necessity of having an in-house digital studio to meet these demands.

Customer Experience Data Center Expansion:

Continuing further, Swamy says, “The second thing is that we are actually increasing customer experience data center to twice the capacity for which you need money.”

To enhance customer experience, RK Swamy plans to invest in expanding its data center capacity. This initiative is a crucial step towards ensuring the company can handle the increasing volume of data generated from its digital activities, creating a robust foundation for future growth.

Technological Upgradation:

“The third reason,” according to Swamy, “is serious technological upgradation that we need to do. And that calls for certain serious capital.”

Recognising the rapid evolution of technology, RK Swamy acknowledges the importance of staying technologically relevant. The funds raised from the IPO will be allocated to significant technological upgrades, ensuring the company remains at the forefront of innovation in the media and advertising landscape.

Working Capital Boost:

“And fourth is to raise some working capital, because working capital is oxygen that raises all our businesses. That’s part of the objectives of the research,” Swamy adds.

Understanding the critical role of working capital in sustaining business operations, RK Swamy plans to allocate a portion of the funds to strengthen its working capital. This financial manoeuvre aims to provide the company with the necessary liquidity to navigate the dynamic business environment.

RK Swamy aims to raise a total of Rs 423 crore through its IPO. Of this, Rs 173 crore will be directed towards the company, while the remaining Rs 250 crore will go to the promoters and other shareholders.

Digital Strategy Fortification and Future Vision:

“Digital strategy is already in place because digital is moving at 24%. And I told you we are doing two things – one is to increase our output with a digital video studio; and the other one is technology infrastructure.”

RK Swamy envisions a future deeply rooted in digital strategies. The establishment of a digital video studio and the enhancement of technology infrastructure align with the company’s commitment to navigating the digital landscape, which is currently growing at an impressive rate of 24%. The company's future growth is expected to be fueled by these digital initiatives, setting the stage for a dynamic and innovative future.

RK Swamy’s IPO launch appears to be a strategic move aimed at fortifying its position in the digital era, ensuring it remains a key player in the competitive media and advertising industry. The allocated funds are set to empower the company to meet the evolving demands of the digital landscape and position itself for sustained growth.