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HomeShop18 posts Rs 83.9 Cr loss in FY14; Revenue up 63.4% YoY to Rs 368.2 Cr

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TV18 Home Shopping Network (HomeShop18) has reported net revenues of Rs 368.2 crore for the financial year ended March 31, 2014 (FY14), registering a 63.4% increase from Rs 225.4 crore revenues in the previous year.

The losses also have improved to Rs 83.9 crore for the year, from Rs 120 crore in the previous year. Network18 however hasn’t provided any split between HomeShop18′s TV and online business.

It’s worth noting that TV18 Home Shopping Network is a 100% subsidiary of Network18’s Cyprus-based subsidiary Network18 HSN Plc (previously TV18 HSN Holdings limited) in which Network18 holds 53.71% stake as of March 31, 2014. The remaining stake is held by SAIF II Mauritius Company Limited, G S Home Shopping Inc, Makira SP5 limited and Orchard Centar Master limited.

HomeShop18 IPO: In April this year, Network18 HSN Plc filed for a $75 million IPO on NYSE, making it the fourth Indian Internet firm to list in the US, after Rediff, Sify and MakeMyTrip.

The company had noted that it will not receive any proceeds from the sale of ordinary shares by Network18 Holdings Limited and other selling shareholders. Instead, it will receive the rupee equivalent of $42.3 million of the proceeds which Network18 Holdings Limited expects to receive from its sale of ordinary shares in this offering. Following this, HomeShop18 will be using these funds to purchase the equity interest in its Indian subsidiary currently held by Network18 within 45 days of the completion of this offering.

HomeShop18 had also noted that it may use a part of these proceeds for acquisitions or strategic investments in technologies, solutions or businesses that complements the company’s business, although it currently doesn’t have any such commitments.

While RIL acquired Network18 in May this year, Homeshop18 CEO Sundeep Malhotra told employees in June that the IPO is still on, although three board members of the company would change. (Also readReliance Retail plans to launch e-commerce stores)

Notes from HomeShop18’s IPO filing:

– FY11: operating revenues of $19.2 million. GMV (net of returns) was $62.6 million. Loss after tax was $12.7 million. Adjusted EBITDA loss was $11.4 million
– FY12: operating revenues of $24.5 million. GMV (net of returns) was $108.5 million. Loss after tax was $22.5 million. Adjusted EBITDA loss was $20.9 million
– FY13: operating revenues of $40.7 million, 66.4% up. GMV (net of returns) was $166.5 million. Loss after tax was $25.8 million. Adjusted EBITDA loss was $19.2 million
– Six month period ending September 30th 2013: $25.6 million, 67.1% up. GMV (net of returns) was $94.6 million. Loss after tax was $10.6 million. Adjusted EBITDA loss was $7.6 million. TV business reported a segment profit of $0.3 million, “which was the first segment profit for either of our business segments since our inception.”

Repeat business rate: 34.9% in FY11, 39.9% in FY12, 46.7% in FY13, 45.4% in H1-FY14

Internet Business:

– Revenues: $0.35M in FY11, $3.963M in FY12, $8.361M in FY13 and $4.08M for the 6 months ended September 30th 2013.
– Gross transaction value: $1.81M in FY11, $30.80M in FY12, $55.55M in FY13, $23.16M in H1-FY14.
– Average gross commission: 19.4% in FY11, 12.8% in FY12, 15.0% in FY13, 17.2% in H1-FY14.
– Average order value: $44.1 (Rs 2011) in FY11, $27 (Rs 1299) in FY12, $19.4 (Rs 1064) in FY13, $25.0 (Rs 1501) in H1-FY14.
– Contribution to total operational revenue: 1.8% in FY11, 16.2% in FY12, 20.5% in FY13 and 15.9% in H1-FY14.
– Contribution to gross transaction value: 2.9% in FY11, 28.4% in FY12, 33.4% in FY13 and 24.5% in H1-FY14.

Cash on Delivery

– Contribution of Cash On Delivery transaction to total transactions: 88.5% in FY11, 85.8% in FY12, 80.6% in FY13, and 85.4% in H1 2014.
– “The courier companies may also, in some instances, impose collection charges on us for COD transactions, which is usually the higher of 1.5% of the value of the shipment and a minimum payment that has recently averaged Rs. 32 (approximately $0.5)”

Previous fundraising

– Network18: has invested $53.8 million so far, of which $39.9 million were invested in December 2013.
– GS Home Shopping: has invested around $29.5 million so far. This includes $11 million in October 2013 and $18.5 million in November 2009.
– OCP Asia: had invested $15 million in April 2013.

The company had also reportedly raised Rs 100 crore from existing investors SAIF Partners, Network18 and GS Shopping in July 2011.

A lowdown of HomeShop18’s IPO here.

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