Studio LSD

• Studio LSD is coming out with an initial public offering (IPO) of 1,37,50,000 equity shares in a price band Rs 51-54 per equity share.
• The issue will open on August 18, 2025 and will close on August 20, 2025.
• The shares will be listed on SME Platform of NSE.
• The face value of the share is Rs 2 and is priced 25.50 times of its face value on the lower side and 27 times on the higher side.
• Book running lead manager to the issue is Corpwis Advisors.
• Compliance Officer for the issue is Kiran Parmanand Goklani.

Profile of the company

Studio LSD where LSD stands for Laxmi Saraswati and Durga, is a multimedia production house specialising in original and captivating stories, partnering with artists from the film and televisions industry. The company is involved in every aspect of the content-making process, from idea to distribution and financing the projects, hiring actors and crew members, scouting locations, creating sets, managing the budgets, and overseeing the entire production and post-production process.

The company has gained prominence within the television industry, particularly in producing soap opera content. It is always committed to delivering quality television programs and have effectively carved out a niche for itself across multiple television channels. Its expertise lies in crafting compelling narratives and engaging storylines that captivate audiences, in the competitive world of soap opera production. Across various television channels, the company has consistently produced shows, showcasing its expertise in storytelling and entertainment. The company operates as a full-fledged production house, specializing in developing a wide array of show concepts through collaboration with its talented team and network of skilled scriptwriters.

Its promoters, Prateek Sharma and Parth Shah, creates original and modern concepts across various genres, meeting audience expectations while preserving the essence of episodic storytelling. This commitment to creativity with traditional narrative roots helps in consistently delivering content that resonates with modern viewers.

Proceed is being used for:

• Capital expenditure
• Working capital requirements
• General corporate purposes

Industry Overview

The Indian Media and Entertainment (M&E) industry is a sunrise sector for the economy and is making significant strides. The increasing availability of fast and cheap internet, rising incomes, and increasing purchases of consumer durables have significantly aided the industry. India’s media and entertainment industry are unique as compared to other markets. The industry is well known for its extremely high volumes and rising Average Revenue Per User (ARPU). This significantly aided the country’s industry and made India leading in terms of digital adoption and provided companies with uninterrupted rich data to understand their customers better. India has also experienced growing opportunities in the VFX sector as the focus shifted globally to India as a preferred content creator.

The country's entertainment and media industry is expected to see a growth of 9.7% annually in revenues to reach $73.6 billion by 2027. India internet users are expected to reach 900 million by 2025, from ~622 million internet users in 2020, increasing at a CAGR of 45% until 2025. The advertising-based video on demand (AVoD) segment is expected to rise at a CAGR of 24% to reach $2.6 billion by 2025. Further, Revenue of the Indian video OTT market that is dominated by players such as Amazon Prime Video, Netflix and Disney+ Hotstar is set to double from $1.8 billion in 2022 to $3.5 billion by 2027. The Indian media and entertainment industry is anticipated to reach $24-100 billion by 2030. Within the M&E sector, TV remained the largest segment and posted a CAGR of 7% to Rs 84,700 crore ($12.01 billion) in 2023. The Indian mobile gaming market is poised to reach $7 billion, in value, by 2025.

The India M&E sector is set for substantial growth, with a projected 10.2% increase, reaching Rs. 2,55,000 crore ($30.8 billion) by 2024 and a 10% CAGR, hitting Rs 3.08 trillion ($37.2 billion) by 2026. The Indian media and entertainment sector posted a robust 19.9% growth in 2022 and crossed the Rs 2 lakh crore ($24 billion) mark in annual revenue for the first time led by a sharp jump in the digital advertising mop-up. India's media and entertainment industry is the fifth largest market globally and is growing at the rate of 20% annually. India’s Media and Entertainment Industry is expected to grow 10.2% to reach Rs. 2,55,000 crore ($30.72 billion) by 2024, then grow at a CAGR of 10% to reach Rs 3,08,000 crore ($37.11 billion) by 2026.

Pros and strengths

Comprehensive production capabilities: The company manages the entire production process in-house, from concept development and pre-production planning to post-production and final delivery. This integrated approach allows for greater control over quality, timelines, and budget management, distinguishing it from competitors who may outsource some production phases.

Diverse content portfolio: The company produces a diverse range of content, including episodic dramas, reality shows, and special event programming. This diversity not only caters to varied audience preferences but also mitigates risks associated with fluctuations in genre popularity or viewer demographics.

Strategic partnerships: Collaborations with renowned artists, celebrities, and production houses enhance its creative capabilities and market reach. These partnerships strengthen its competitive position by expanding audience appeal and leveraging shared expertise.

Risks and concerns

Maximum revenue comes from limited customers: The company has established and will continue to focus on strengthening long-standing relationships with its customers across the end use industries that it caters to. However, the company is dependent on certain customers who have contributed a substantial portion of its total revenue from operations. The company has garnered 93.03%, 100% and 100% from its top 5 customers in FY25, FY24 and FY23 respectively. There is no guarantee that it will retain the business of its existing key customers or maintain the current level of business with each of these customers, the loss of these customers or a loss of revenue from these customers may materially affect its business, financial condition, results of operations and cash flow.

Depend on relationships with production house, channels and serial director: The company generates projects through its relationship with production house, channels and serial directors and other industry participants. The company's ability to generate projects largely depends on these relationships. If the company fails to nurture or sustain these connections, it could struggle to secure new projects or fail to capitalize on emerging opportunities. This could significantly hinder business growth, as the company may be unable to access necessary resources or collaborations for creating and distributing content. Furthermore, inability to develop new relationships with industry players could stifle innovation, limit access to key partnerships, and restrict its ability to expand its project pipeline. Over time, this could have a substantial negative impact on its company’s long-term financial health, prospects, and overall operational performance. In short, the company’s business model is highly dependent on these relationships, and any disruption could have material consequences for its financial stability.

Require additional working capital in the future: The company’s business requires additional amount of working capital and major portion of its working capital is utilized towards employee cost, hiring talents, studio rentals and equipment rentals. Its growing scale and expansion, if any, may result in increase in the quantum of current assets. Its inability to maintain sufficient cash flow, credit facility and other sourcing of funding, in a timely manner, or at all, to meet the requirement of working capital or pay out debts, could adversely affect its financial condition and result of its operations. Further, it has high outstanding amount due from its debtors which may adversely affect its cash flows and its business operations.

Outlook

Studio LSD is a multimedia production house specializing in original content for television and OTT platforms, known for innovative storytelling and high-quality, genre-defining shows across India, focusing on captivating digital series with a strong creative vision. The company has comprehensive production capabilities with diverse content portfolio. On the concern side, the company’s business is significantly dependent upon a few customers and the loss of, or a significant reduction in the award of contracts by such customers could adversely affect its business. Moreover, the company is dependent on its relationships with production house, channels and serial directors and other industry participants to exploit its serial content.

The company is coming out with a maiden IPO of 1,37,50,000 equity shares of Rs 2 each. The issue has been offered in a price band of Rs 51-54 per equity share. The aggregate size of the offer is around Rs 70.13 crore to Rs 74.25 crore based on lower and upper price band respectively. On performance front, the company’s revenue from operations has increased by 1.95% from Rs 10,247.54 lakh for FY 2023-24 to Rs 10,447.81 lakh for FY 2024-25. The increase in revenue was majorly because of increase in number of episodes of serials/soaps. Moreover, profit after tax has increased by 7.03% from Rs 1,090.37 lakh for FY 2023-24 to Rs 1,167.00 lakh for FY 2024-25.

The company differentiates itself by focusing on delivering creative and quality content fostering a culture of innovation and creativity. The company is partnering with leading OTT platforms for direct-to-digital releases, bypassing traditional broadcasting models. Exploring revenue-sharing arrangements for streaming rights instead of outright content sales and identifying niche content segments (regional, genre-based, or premium content) to create a strong foothold in the digital space. Going forward, the company is expanding into the music business by developing and distributing original music content across digital streaming platforms like Spotify, Apple Music, YouTube Music, and others. It is also leveraging YouTube and social media platforms for music video distribution and audience engagement.