Eros International Plc has filed an IPO with the US Securities and Exchange Commission (SEC) on March 30, 2012 and intends to raise $250 million. It has not revealed the number of shares or the starting price yet. Deutsche Bank Securities, BofA Merrill Lynch, Citigroup and UBS Investment Bank have been appointed as the joint-underwriters and the company’s stock symbol on the New York Stock Exchange (NYSE) will be EROS’.

The company stated that it is currently listed in the Alternative Investment Market (AIM), London Stock Exchange under the symbol ‘EROS’, however the company will apply for de-listing of its ordinary shares, following the share listing in NYSE.

Notes from the F-1 SEC filing:

Rights: Eros International currently owns rights for 2600 movies which also includes a catalog of 700 Kannada movies for which it only has digital rights. 47% of these movies are regional language movies (excluding Kannada) followed by 28% Kannada Movies and the rest 25% are Hindi Movies. Eros also owns music rights for 57% of its Hindi movies and 32% of its regional movies (excluding Kannada). It doesn’t own music rights in any of its Kannada movies.

Eros distributes movies over 50 countries internationally, including South Asian markets, Middle East, the United States and the United Kingdom. The company has distributed over 55 movies in the period March 2011-December 2011 and over 270 films in the last three fiscal years. Hindi Films constitute a significant portion of revenues and associated content costs. The company distributed 15 Hindi movies globally in the last three years.

Digital Revenues: Digital distribution along with ancillary products and services accounted for 20% of the company’s revenues.The aggregate revenues stood at $47.1 million for the fiscal 2011, up from $46.6 million in 2010 and $46.4 million in 2009. For the nine months ending December 2011, the revenues stood at $35.7 million, a 14.7% dip from $41.7 million in the nine months ended December 2010. The reason for this loss was stated as lower revenues from its digital catalog and a one-time sale of 3D rights in 2010.

Revenues: Eros International’s total revenues increased to $164.6 million in the fiscal 2011, up from $149.7 million in fiscal 2010. It recorded revenues of $166.3 million for the nine months ended December 31, 2011, up from $124.3 million for the nine months ended December 31, 2010.

The operating profit (EBITDA) stood at $58.6 million in fiscal 2011, up from $53.2 million in fiscal 2010. It recorded an operating profit of $59.6 million for the nine months ended December 31, 2011, up from $45.4 million for the nine months ended December 31, 2010. The net income increased to $47.6 million for fiscal 2011, from $42.4 million for fiscal 2010 and to $45.5 million in the nine months ended December 31, 2011, from $37.4 million for the nine months ended December 31, 2010.

India v/s Overseas Revenues: Eros International earned 66.7% of its revenues from India, recording a total revenue of $108.3 million in fiscal 2011, up from $96.2 million in fiscal 2010 and $99.3 million in fiscal 2009.  It recorded revenues of $110.9 million for the nine months ended December 31, 2011, up from $83.3 million for the nine months ended December 31, 2010.

Europe accounted for 13.1% of its revenues, recording $21.79 million revenues in fiscal 2011, up from $19.42 million in fiscal 2011, followed by North America which accounted for 5.3% of its revenues, recording $8.6 million revenues in the fiscal 2011, up from $8.1 million in the fiscal 2010. Rest of the world accounted for 14.9% of its remaining revenues, recording $25.87 million revenues, down from $25.99 million in the fiscal 2010.

Digital Channels and Partnerships: Eros International’s digital distribution channels includes Internet Protocol television (IPTV), video on demand (VOD), and Internet channels. In September 2011, it had joined YouTube as a content partner, beginning with the launch of Ra.One’s music release. The company claimed to have generated over one billion aggregate views on this channel and stated that it monetizes these videos by selling banner and pre-roll advertisements and sharing the advertising revenues with Google, although the exact revenue share numbers weren’t revealed.

It had recently launched an online movie streaming service called Eros Now which currently offers a limited number of movies and music videos but will eventually include Eros’s entire film library and will be accessible via tablets. The company intends to support Eros Now through advertising and subscription revenues. While the free service will offer ad-supported content, the premium service will offer subscribers an ad-free access to their content across multiple devices.

Overseas, Eros has a partnership with Comcast’s subsidiary, International Networks to provide  subscription video on demand (SVOD), service called ‘Bollywood Hits On Demand’ on Comcast, Cox Communications, Rogers Communication, Cablevision and Time Warner Cable.

Risk Factors

Piracy: Eros International states that digital and Internet Piracy in the country may adversely affect the company’s revenues. Further, a lack of an Internet-specific legislation relating to trademark and copyright protection and the existing copyright and trademark laws in India which provide only a limited practical protection, makes it difficult to protect content delivered through such media.

Digital Distribution: Eros International also stated that the new interpretations of copyright laws, which were adopted before the emergence of Internet, may result in increase of digital distribution costs, forcing Eros to change business practices related to digital distribution.