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IPO ANALYSIS     Open and Forthcoming Issues :             DQ Entertainment (International) Ltd.                          08-March-2010 - 10-March-2010 Company Details  Business Description             * DQ Entertainment Ltd (DQEL) was incorporated as Animation & Multimedia Pvt. Ltd. on April, 2007. The name of the company was changed to DQ Entertainment Pvt. Ltd. on January 2008 & later changed to DQ Entertainment Ltd. in September 2008.     * DQEL’s is in the business of production, co-production & distribution of animation, visual effects, game art, TV series, direct-to-home videos, feature films & live action television.     * The company has 10 production facilities in India with its Production, Sales, Licensing and Distribution centers in Hyderabad, Chennai, Mumbai, Kolkata, Manila, Ireland, Paris, Los Angeles and Japan.     * Post issue the shareholding of the promoter & promoter’s group will reduce from existing 94.03% to 75%.Fitch Ratings has assigned an IPO Grade 3 to DQEL’s IPO indicating average fundamentals. Fitch Ratings assigns IPO grading on a scale of 5 to 1, with Grade 5 indicating strong fundamentals and Grade 1 indicating poor fundamentals.  Address 644, Aurora Colony, Road Number 3, Banjara Hills, Hyderabad - 500034 Phone    91-40-23553726/27 Email investors@dqentertainment.com Fax  91-40-23552594 Website http://www.dqentertainment.com Issue Details Issue Open 8-Mar-10 Issue Close 10-Mar-10 Issue Size  1,60,48,011 Equity Shares Issue Type Book Building Face Value Rs.10/- Tick Size Re.1/-  Price Range Rs. 75/- to Rs. 80/- Objective Minimum Order Qty 80     * To invest in co-production agreements, focusing on IP content creation.     * Development of office premises & production facilities, and development of infrastructure and additional facilities at the SEZ Unit, Kokapet Village, Rangareddy District, Andhra Pradesh.     * To invest in its subsidiary, DQ Entertainment (Ireland) Ltd.  Market Lot 80   Registrar To The Issue Karvy Computershare Pvt. Ltd. Listing Stock Exchange Mumbai, NSE   # Net sales of the company have increased at 62.45% to Rs. 149.82 cr in FY09 from Rs. 92.22 cr in FY08. For 6 months period ending September 2009, net sales of the company stood at Rs. 65.72 cr. up by 42.52% (yoy). The decline in growth rate of 6 months ending on September 2009 is because of a drastic fall in revenue from the gaming sector. # OPM of the company has improved from 24.75% in FY08 to 35.12% in FY09. NPM of the company has increased from 7.59% in FY08 to 13.30 % in FY09. During 6 months period ending September 2009, OPM stood at 33.87% while NPM stood at 15.61 %. The reason for decline in OPM is basically due to decline in operating efficiency of the company which has lead to an increase in the expenses by 2% because of 1.5% rise in employees cost. # PAT has increased at 129.8% to Rs.16.09 cr. in FY09 from Rs.7 cr. in FY08 mainly because of reduction in financial expenses of the company. For 6 months period ending September 2009, PAT of the company stands at Rs.10.26 cr. up by 27.53%. Book Running Lead Managers SBI Capital Markets Ltd.             Peer Analysis Company Net Sales (Rs. cr) PAT (Rs. cr) Compact Disc 105.88 22.01 Prime Focus 44.71 4.3 DQEL 70.55 10.24       United Bank of India   : Snapshot                                                                          Annual Results                                                     (Rs. in Crore)   March ' 09  March ' 08       Sales  149.82 92.21       Other Income  1.09 2.36       Employee Expenses  69.34 51.03       Excise  0.00 0.00       Admin And Selling Expenses  29.66 13.61       Research And Devlopment Expenses  0.00 0.00       Expenses Capitalised  -7.08 -0.28       Other Expeses  5.27 5.05       Provisions Made  0.00 0.00       Operating Profit  52.62 22.81       Interest  5.56 4.34       Gross Profit  48.16 20.83       Depreciation  28.22 12.73       Taxation  3.79 1.09       Net Profit / Loss  16.09 7.00       Extra Ordinary Item  0.00 0.00       Prior Year Adjustments  -0.07 -0.01       OPM(%)  35.12 24.73       GPM(%)  31.91 22.02       NPM(%)  10.65 7.40       EPS (in Rs.)  98.86 43.02                                 Statement of Dividend Paid                                                                              Annexure X  (Rupees in lacs) The declaration and payment of dividend will be recommended by our Board and approved by the shareholders of the Company at their discretion and will depend on a number of factors, including the results of operations, earnings, capital requirements and surplus, general financial conditions, contractual restrictions, applicable Indian legal restrictions and other factors considered relevant by the Board. Further, pursuant to the terms of the term loans obtained by the Company, prior written consent of the lenders of the Company is required to pay any dividends. The Board may also from time to time pay interim dividend. All dividend payments are made in cash to the shareholders of the Company. We have not declared any dividend on the Equity Shares since inception. Our dividend policy in the past is not necessarily indicative of our dividend policy or dividend amounts in the future. Regent Finance Corporation (P) Ltd : 60A Chowringhee Rd., 2nd Floor, Kolkata - 700020, India, Ph # (91) (33) 30513032 / 34, 66339332 / 34, Fax# (91) (33) 30513033, email: research@regentmoney.com, Visit us at: www.regentmoney.com