Identical Brains Studios Ltd IPO

The IPO opens on 18 Dec 2024 & closes on 20 Dec 2024.

Identical Brains Studios Limited was incorporated as a One Person Company under the name 'Identical Brains (OPC) Private Limited' dated February 04, 2019 issued by the Assistant Registrar of Companies, Central Registration Centre, Manesar. Further, Company was converted from a OPC to Private Limited Company to 'Identical Brains Private Limited' with a fresh Certificate of Incorporation dated July 08, 2021 in Mumbai. Subsequently, the name again changed to 'Identical Brains Studios Private Limited' on June 18, 2024. Thereafter, the status of the Company converted from a Private to a Public Limited and the name was changed to 'Identical Brains Studios Limited' with a fresh Certificate of Incorporation dated August 12, 2024, issued by the Central Registration Centre. The Company is a provider of computer-generated visual effects (VFX) services, offering comprehensive suite of VFX services in diverse range of projects such as films, web series, TV series, documentaries, and commercials. Their operations are currently from India and the customers include some of the leading film and content producers, including major Bollywood Studios. The Company transform the imagination, ideas, and words into captivating visual realities. Their team of qualified, creative and technical professionals collaborates to bring forth creations that elevate storytelling and captivate audiences worldwide. The Promoter, Raghvendra Rai, has an extensive experience of around 10 years in the VFX Industry and under his leadership, the Company has rapidly emerged as a prominent player in developing proprietary workflow processes and technologies to provide cutting-edge VFX services to customers. At present, the Company is engaged in the business of providing Visual effect services, Films, Video Production, and Distribution services to the industries. The Company has provided VFX services for films that achieved significant industry recognition. Their profile includes upcoming projects like Tanaav 2, Criminal Justice 4, and completed projects include Khel Khel Mein, Murder in Mahim, Bad Cop, The Crew, Article 370, Mission Raniganj, Dream Girl 2, Adipurush, Indian 2, Rocket Boys, Bob Biswas, Kutch Express, Ek Villian Returns, Night Manager, Criminal Justice 3, Phone Bhoot, Satyamev Jayate 2, Angrezi Medium, Scam 1992: The Harshad Mehta Story, Good Newwz, Panipat and many more. Since 2019, the Company launched VFX Project for Scam 1992 - The Harshad Mehta Story; launched VFX Project for Satyamev Jayate 2 and Rocket Boys Season - 1 in 2022 and commenced operations in Palghar. In 2023, it launched VFX Project for Phone Bhoot, Rocket Boys Season - 2, Adipurush, Indian 2 and commenced operations in Lucknow. In 2024, it launched VFX Project for Article 370, The Crew, Murder in Mahim, Khel Khel Mein. The core strength of the Company implies projects of any size or scope, whether it is a small-scale production or a large-scale blockbuster, the Company deliver results with expedited turnaround times while maintaining scalability for sustained long-term growth. The Company issued 36,94,000 equity shares via its IPO of face value Rs 10 by raising 19.95 crores in December 2024.

Identical Brains Studios Ltd IPO will close on 20 Dec 2024.

<ul><li>Integrated and highly scalable service delivery capabilities.</li><li>Reputation as a trusted provider of VFX Services with established relationships throughout the Entertainment Industry.</li><li>Attractive business model, with significant revenue visibility and compelling opportunities for long-term margin expansion and cash flow generation.</li><li>Experienced management team with managerial, creative and technical expertise and industry relationships.</li></ul>

<table class="table"> <thead> <tr> <th>S.No</th> <th>Promoters Name</th> <th>Pre Issue Shares</th> <th>Pre Issue Percentage</th> <th>Post Issue Shares</th> <th>Post Issue Percentage</th> </tr> </thead> <tbody> <tr> <td>1</td> <td>Raghvendra Rai</td> <td>8850600</td> <td>85.66</td> <td>8850600</td> <td>63.1</td> </tr> <tr> <td>2</td> <td>Sameer Rai</td> <td>89400</td> <td>0.87</td> <td>89400</td> <td>0.64</td> </tr> </tbody> </table>

<ul><li>The company depends upon its relationships with the major Bollywood studios, including key executive and creative talent, and any deterioration in these relationships could materially and adversely affect its business. </li><li>The Company operates in the constantly evolving entertainment industry, which is subject to rapidly changing consumer behaviour and tastes, and depends on audience acceptance of content for which the company provide VFX services and the longterm popularity of the brands and franchises that its customers produce. </li><li>If the film and content producers reduce the amount of VFX content they produce and release, the company's revenue would likely decline.</li><li>Its order book and order pipeline are not necessarily indicative of its future revenue or other results of operations and its may not fully realise the revenue value reported in the company order book and order pipeline. </li><li>Film and content producers may delay, suspend or terminate its contracts, which could negatively affect the company revenue and harm its reputation and prospects.</li><li>The company is currently dependent on its top ten customers for its revenues. Further the company does not have any long-term commitments from customers and any failures to continue its existing arrangements could adversely affect the company's business and results of operations.</li><li>Recent and planned acquisitions among film and content producers, may reduce the breadth of its customer base, and could result in a narrower market for its services, increase competition and reduce negotiating leverage.</li><li>If the company is unable to develop and maintain technologies to support customers' evolving needs in response to changes in consumer demand, or fails to maintain the quality of its services and its reputation with customers, its business and prospects could suffer.</li><li>The VFX Industry in which the company operates possess various risks and challenges as provided in the Industry Report titled "Report on VFX Industry in India" dated August 20, 2024, which is exclusively prepared for the purposes of the Issue and issued by D&B and is commissioned and paid for by the Company ("D&B Report").</li><li>The company secure contracts from both film and content producers and through sub contracting arrangements.</li><li>The company has and may in the future experience security breaches and cyber threats.</li><li>Competition from other providers of services or new technologies to the visual entertainment industry could adversely affect its business.</li><li>The company may be subject to claims of infringement of third-party intellectual property rights that are costly to defend, result in the diversion of management's time and efforts, require the payment of damages and limit its ability to use particular technologies in the future.</li><li>Global market, economic and geopolitical conditions may adversely affect its business, results of operations, liquidity and financial condition and those of the company customers.</li><li>Its Directors and Promoters may enter into ventures which are in businesses similar to its.</li><li>The company has experienced negative cash flows in the six months ended September 30, 2024 and for the previous Fiscals and may continue to have negative cash flows in the future.</li><li>Its business requires significant amount of working capital. The company may not be able to obtain future financing on favourable terms or at all. If its experience insufficient cash flows from the company operations or are unable to borrow funds to meet its working capital requirements, it may materially and adversely affect its business and results of operations.</li><li>From time-to-time studios have sought to defer part of its fees for services until after a film is released.</li><li>The company is exposed to foreign currency fluctuation risks, particularly in relation to export of its services, which may adversely affect the company results of operations, financial condition and cash flows.</li><li>There are outstanding legal proceedings involving the Company, Promoters and Directors. Any adverse decision in such proceedings may have a material adverse effect on its business, results of operations and financial condition. </li><li>There has been delay in filing of forms with the Registrar of Companies as per the stipulated timelines prescribed under the Companies Act, 2013. Any penalty or action taken by any regulatory authorities in future, for delay in such compliances could impact the reputation and financial position of the Company to that extent. </li><li>There have been instances where certain statutory forms are missing or corrupted on the records of the Ministry of Corporate Affairs (MCA) due to the technical issues of the V3 portal which poses potential risks, including penalties, legal challenges, and regulatory actions, which could impact the Company's reputation and financial stability.</li><li>The company experienced delays in filing GSTR-3B returns across multiple financial years.</li><li>Its inability to protect or use the company intellectual property rights may adversely affect its business. </li><li>Non-compliance with and changes in any of the applicable laws, rules or regulations may adversely affect its business, results of operations and financial condition and cash flows.</li><li>The company requires certain approvals, licenses, registrations and permits for conducting its business and the company inability to obtain, retain or renew them in a timely manner, or at all, may adversely affect its business, results of operations and financial condition.</li><li>The Objects of the Issue for which the funds are being raised have not been appraised by any bank or financial institutions. Any variation in the utilization of its Net Proceeds as disclosed in this Red Herring Prospectus would be subject to certain compliance requirements, including prior Shareholders' approval. </li><li>The company intend to utilise a portion of its Net Proceeds for purchase of computers, storage systems and software to further strengthen the existing facilities/offices of the company. Any delay in placing orders or procurement of such computers, storage systems and software may delay the schedule of implementation.</li><li>The objects of the Issue include funding incremental working capital requirements, which is based on certain assumptions and estimates. Any failures in arranging adequate working capital for its operations may adversely affect the company business, results of operations, cash flows and financial conditions. </li><li>The company has not disclosed the names of its customers which includes major Bollywood studios and other film and content producers in the Red Herring Prospectus due to which there is a risk of limited transparency.</li><li>The tools that the company relies upon to prepare and submit a bid for a project may prove to be inaccurate, and its may not achieve anticipated levels of revenue and profits.</li><li>The company's performance depends on its key managerial, senior management, creative and technical teams, and the company may be unable to attract and retain key managerial, senior management, creative and technical personnel.</li><li>The company is dependent on proprietary technology licensed from others. If the company lose the licenses, its may not be able to continue servicing the company's customers or developing its work product.</li><li>Interruption or failures of the company's information technology or data backup systems could impair its ability to provide the company services effectively and in a timely manner, and could result in loss of work product, customer files or other valuable data.</li><li>Strikes by writers, actors or other participants in the visual entertainment industry could negatively affect its revenues.</li><li>If incentives for film and content production in the jurisdictions in which the company operates are altered, challenged or revoked or similar incentives are introduced in other jurisdictions, film and content producers may shift their productions to jurisdictions in which the company currently has no presence or may reduce their level of production in general.</li><li>Its business depends upon communications networks operated by third-party providers as well as the internet, the disruption of which could negatively affect its business.</li><li>Increases in operational costs, including wage increases, in India may prevent the company from sustaining its competitive advantage and may reduce the company profit margin. </li><li>Restrictions on entry visas may affect our ability to compete for and provide services to customers in certain countries, which could have a material adverse effect on future revenue.</li><li>The international nature of VFX business exposes it to several risks, such as significant currency fluctuations and unexpected changes in the regulatory requirements of multiple jurisdictions.</li><li>Its Registered and Branch Offices are operated on rented premises and its inability to renew such leave and license agreements may adversely affect its business, results of operations and financial condition. </li><li>If the company fails to maintain an effective system of internal controls, its may not be able to successfully manage, or accurately report, its financial risks. Despite its internal control systems, the company may be exposed to operational risks, including fraud, petty theft and embezzlement, which may adversely affect its reputation, business, financial condition, results of operations and cash flows.</li><li>Any inability to expand its business into new regions and markets in India or the sub-optimal performance of its new facilities could adversely affect the company business, prospects, results of operations, financial condition and cash flows.</li><li>Its insurance coverage may not be adequate to protect the company against all potential losses, which may have a material adverse effect on its business, financial condition, cash flows and results of operations.</li><li>The company depends on assets and operations in India, which are subject to regulatory, economic, social and political uncertainties.</li><li>The company has commissioned an industry report from Dun & Bradstreet Information Services India Private Limited, which has been used for industry related data in this Red Herring Prospectus.</li><li>Its Promoters and Promoter Group will continue to retain a majority shareholding in the Company after the Issue, which will allow them to exercise significant influence over it.</li><li>The company has entered, and will continue to enter, into related party transactions which may involve conflicts of interest. Further, its Promoters, Directors and Key Managerial Personnel may have interests in it other than reimbursement of expenses incurred and normal remuneration or benefits.</li><li>The determination of the Price Band is based on various factors and assumptions and the Issue Price of the Equity Shares may not be indicative of the market price of the Equity Shares upon listing on the Stock Exchange.</li><li>The company has presented certain supplemental information of its performance and liquidity which is not prepared under or required under AS.</li><li>Significant differences exist between Indian GAAP and other accounting principles, such as U.S. GAAP and IFRS, which investors may be more familiar with and may consider material to their assessment of its financial condition. </li><li>Pursuant to listing of the Equity Shares, the company may be subject to pre-emptive surveillance measures like Additional Surveillance Measure (ASM) and Graded Surveillance Measures (GSM) by the Stock Exchange in order to enhance market integrity and safeguard the interest of investors. </li></ul>

The Issue type of Identical Brains Studios Ltd is Book Building - SME.

The minimum application for shares of Identical Brains Studios Ltd is 2000.

The total shares issue of Identical Brains Studios Ltd is 3694000.

Initial public offering of upto 36,94,000 equity shares of face value of Rs. 10/- each ("Equity Shares") for cash at a price of Rs. 54 per equity share (including a premium of Rs. 44 per equity share) ("Issue Price") aggregating to Rs. 19.95 crores ("The Issue"). The issue will constitute [*] % of the post-issue paid up equity share capital of the company. The issue includes a reservation of up to 1,86,000 equity shares aggregating to Rs. 10.04 crores (constituting up to [*] % of the post issue paid-up equity share capital of the company) for subscription by market maker ("Market Maker Reservation Portion"). The issue less the market maker reservation portion is hereinafter referred to as the "Net Issue". The issue and the net issue will constitute [*] % and [*] % respectively, of the post-issue paid-up equity share capital of the company.