Hungama Digital Media Entertainment is gearing up to raise Rs 50 crore through a rights issue, with the anticipated fund infusion scheduled for completion by the end of March, as reported by Care Ratings.
The timely injection of funds through the rights issue is deemed crucial from a credit perspective, according to the ratings agency.
While the company chose not to comment on the matter, it’s worth noting that Hungama is supported by notable entities such as Intel Capital Corporation, Bessemer Venture Partners Trusts, XIAOMI Singapore, and Rare Enterprises, the investment firm of the late Rakesh Jhunjhunwala. Following Jhunjhunwala’s passing, his stake in Hungama was transferred to his wife, Rekha Rakesh Jhunjhunwala.
Care Ratings has adjusted the rating for Hungama’s bank facilities from stable to negative due to weak operational performance and losses recorded in FY23.
Hungama stands as a leading digital entertainment company with a focus on music, video, and gaming. It holds exclusive digital rights for over 30 million music and video titles globally, monetizing them across various digital media platforms.
In FY23, the company reported a net loss of Rs 6.29 crore compared to a profit of Rs 7.42 crore in FY22. Despite a marginal increase in revenue from Rs 334.52 crore in FY22 to Rs 346.45 crore, the shift in operational performance prompted the revision in the company’s credit rating.
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