Thinking Hats Entertainment Solutions Ltd IPO

The IPO opens on 25 Sept 2024 & closes on 27 Sept 2024.

Thinking Hats Entertainment Solutions Limited was incorporated on February 11, 2013 as Thinking Hats Entertainment Solutions Private Limited', with the Registrar of Companies, Delhi and Haryana. Further, the Company converted into a Public Limited Company and the name of the Company was changed to Thinking Hats Entertainment Solutions Limited' and a fresh Certificate of Incorporation dated September 07, 2023 was issued by the Registrar of Companies, Mumbai. Thinking Hats has evolved from a premier concept development, event design and production company that specializes in the business of entertainment, event management and retail merchandise. In 2015, the Company began its event management and retail visual merchandising since incorporation and has been offering event management services related to Corporates Events, Corporate Meetings, Conference Management, Brands and Product Launches, Lifestyle and Fashion Events, Exhibitions & Fairs, Entertainment Show Management, Pan-India Ground Activations and Artist Management among others in India. Our Event Management services are offered from Media, Retail, Financial, Food, Education, Healthcare and Technology industries. It also provide prominent display and retail visual merchandise with a broad spectrum of offerings and in-store solutions to various retail stores. In 2019, the Company ventured into production of OTT contents. As part of storytelling expertise, the Company produced two web series for OTT platforms i.e., 'Aapkey Kamrey Me Koi Rehta Hai' and 'Kathmandu Connection 2', and one Bengali Movie 'Onek Diner Pore'. Apart from movies and OTT web series, it also made short films for YouTube content and corporate event movies. Company expanded its business to include OTT content production, experiential marketing, and digital content creation in FY 2024. 34,29,000 equity shares were allotted pursuant to Initial Public Offer by raising Rs 15.08 Cr in September, 2024.

Thinking Hats Entertainment Solutions Ltd IPO will close on 27 Sept 2024.

<ul><li>Diversified service portfolio with more than 10 years of track record.</li><li>Geographical presence.</li><li>Strong in-house concept creation and designing expertise.</li><li>Marque Clientele.</li><li>Meeting expectation of clients and maintaining long term relationship with clients.</li><li>Well experienced management team with proven project management and implementation skills.</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>Rajesh Bhardwaj</td> <td>4498750</td> <td>49.67</td> <td>4498750</td> <td>---</td> </tr> <tr> <td>2</td> <td>Gaurav Singhnia</td> <td>1828000</td> <td>20.18</td> <td>1828000</td> <td>---</td> </tr> <tr> <td>3</td> <td>Shruti Singhania</td> <td>1000</td> <td>0.01</td> <td>1000</td> <td>---</td> </tr> </tbody> </table>

<ul><li>The company significantly relies on event management division for a significant amount of revenue, and any interruption or reduction in the customers in the said division may adversely affect its business and results of operations. </li><li>The company is exposed to claims from inadequate performance and defects that may affect the events managed by it and which may have an adverse effect on its business, financial conditions and results of operations. </li><li>Its business is subject to occasional/ seasonal fluctuations that may affect the company cash flows and business operations. </li><li>The company depends on its long term customers for a significant portion of the company revenue, and any decrease in revenues or sales from any one of such key customers may adversely affect its business and results of operations. </li><li>The company typically does not have firm commitment with its customers. If the company customers choose not to source their requirements from it, there may be a material adverse effect on its business, financial condition, cash flows and results of operations.</li><li>The company operates in limited geographies for a significant portion of its revenue and also depends on limited number of customers for the company revenue from operations. Projects in new geographies may not be as profitable as in existing geographies. </li><li>Its operations are subject to risks of mishaps or accidents that could cause damage or loss to life and property and could also result in loss or slowdown in its business. </li><li>Its business is dependent on third party vendors for activities related to the event like décor & production, lighting, and other equipment, other services & facilities etc. Non-availability of such vendor may adversely affect its business and results of operations. </li><li>If the company is not able to obtain, renew or maintain its statutory and regulatory licenses, registrations and approvals required to operate its business, it may have a material adverse effect on the company's business, results of operations and financial condition.</li><li>Its business is dependent upon the taste and preferences of the audience. Any shift in consumer taste and preference will have a negative impact on its business. </li><li>The Company relies on OTT platforms, directors and script writers for its shows. Any delay in delivery of services or payment from these intermediaries may significantly affect its revenues and profitability. </li><li>Risk of uncertainty in the intellectual property right based business model.</li><li>The company is dependent upon key suppliers for execution of its jobs and any disruption in their supply could disrupt its business and adversely affect the company financial results. </li><li>There have been instances of delays in payment of statutory dues, i.e. GST by the Company. In case of any delay in payment of statutory due in future by the Company, the Regulatory Authorities may impose monetary penalties on it or take certain punitive actions against the Company in relation to the same which may have adverse impact on its business, financial condition and results of operations.</li><li>There have been instances of delays in filings of certain forms which were required to be filed as per the reporting requirements under the Companies Act, 2013 to RoC. </li><li>Its third-party suppliers, on whom the company relies for the production of a significant proportion of its products, may fails to deliver products of sufficient quality or in a timely manner, which could adversely affect its reputation, net sales and profitability. </li><li>Its Retail visual Merchandising business derives a major portion of its revenue from leading brands. The loss of a major customer or a significant reduction and sales of, or demand for the company products from its major customers, may adversely affect the company's business, financial condition. </li><li>The industries in which the company operates, are labour intensive and its operations may be materially adversely affected by strikes, work stoppages or increased wage demands by its employees or any other kind of disputes with the company employees. </li><li>As part of its growth strategy, the company intend to expand its business operations to geographical areas in which the company has limited operation history. Its cannot assure you that its expansion plans will be profitable or that such expansion will not adversely affect its business, results of operations and financial condition. </li><li>The commercial success of its services depends to a large extent on the success of the success of its end use customers. If there is any downturn in the industries in which its customers operate, it could have a material adverse effect on its business, financial condition and results of operations. </li><li>The Company has issued Equity Shares in the last one year at a price which is lower that the Issue Price. </li><li>Failures in IT systems and infrastructure supporting its system and operations could significantly disrupt the company operations and have a material adverse effect on its business, results of operations, cash flows and financial condition. </li><li>There can be no assurance that the objects of the Issue will be achieved within the time frame anticipated or at all, or that the deployment of the Net Proceeds in the manner intended by it will result in any increase in the value of your investment. Further, the plan for deployment of the Net Proceeds has not been appraised by any bank or financial institution.</li><li>The company has certain contingent liabilities and its financial condition and profitability may be adversely affected if any of these contingent liabilities materialize.</li><li>Its business and prospects may be adversely affected if the company is unable to maintain and grow the image of its brand. </li><li>There are outstanding litigations involving the Company which, if determined adversely, may affect its business and financial condition.</li><li>Any delays and/or defaults in payments could result in increase of working capital investment and/or reduction of the Company's profits, thereby affecting its operation and financial condition.</li><li>The Company requires significant amount of working capital for a continuing growth. Its inability to meet the company working capital requirements may adversely affect its results of operations. </li><li>The Company proposes to utilize part of the Net Proceeds for repayment or pre-payment, in full or in part, of all or certain secured and unsecured borrowings availed by the Company and accordingly, the utilization of that portion of the Net Proceeds will not result in creation of any tangible assets. </li><li>The company operates in a competitive business environment and its inability to compete effectively may adversely affect the company's business, results of operations, financial condition and cash flows.</li><li>Its Promoters, Directors, Key Managerial Personnel and Senior Management have interests in the Company other than reimbursement of expenses incurred or normal remuneration or benefits. </li><li>Its Promoters and members of the Promoter Group have significant control over the Company and have the ability to direct its business and affairs; their interests may conflict with your interests as a shareholder.</li><li>The average cost of acquisition of Equity Shares held by its Promoters could be lower than the Issue Price.</li><li>Its future fund requirements, in the form of further issue of capital or securities and/or loans taken by it, may be prejudicial to the interest of the Shareholders depending upon the terms on which they are eventually raised.</li><li>The company has in past entered into related party transactions and its may continue to do so in the future.</li><li>Its Promoters have extended personal guarantees with respect to various loan facilities availed by the Company. Revocation of any or all of these personal guarantees may adversely affect its business operations and financial condition.</li><li>Its agreements with lenders for financial arrangements contain restrictive covenants for certain activities and if the company is unable to get their approval, it might restrict its scope of activities and impede the company growth plans. </li><li>In addition to its existing indebtedness for the company existing operations, its may incur further indebtedness during the course of business. The company cannot assure that its would be able to service its existing and/ or additional indebtedness.</li><li>The company has not made any alternate arrangements for meeting its capital requirements for the Objects of the Issue. Further, the company has not identified any alternate source of financing the 'objects of the Issue'. Any shortfall in raising / meeting the same could adversely affect its growth plans, operations and financial performance. </li><li>Its success largely depends upon the knowledge and experience of its Promoters, Directors, the company Key Managerial Personnel and its Senior Management. Loss of any of its Directors and key managerial personnel or its ability to attract and retain them could adversely affect its business, operations and financial condition. </li><li>Its Corporate Office and branch offices are located on premises which are not owned by it and has been obtained on lease basis. Disruption of its rights as licensee/ lessee or termination of the agreements with its licensors/ lessors would adversely impact the company operations and, consequently, its business, financial condition and results of operations.</li><li>Its Group Company, Varaa Exptech Private Limited may have conflict of interest with it as it is engaged in similar business and may compete with the company. </li><li>Its lenders have charge over the company movable and immovable properties in respect of finance availed by it.</li><li>The deployment of funds raised through this Issue shall not be subject to any Monitoring Agency and shall be purely dependent on the discretion of the management of the Company.</li><li>Any variation in the utilisation of the Net Proceeds or in the terms of any contract as disclosed in the Draft Red Herring Prospectus would be subject to certain compliance requirements, including prior shareholders' approval.</li><li>Its inability to procure and/or maintain adequate insurance cover in connection with its business may adversely affect the company operations and profitability.</li><li>Its ability to pay dividends in the future may be affected by any material adverse effect on its future earnings, financial condition or cash flows. </li><li>The company has not independently verified certain data in this Draft Red Herring Prospectus.</li><li>The requirements of being a listed company may strain its resources.</li><li>The Equity Shares have never been publicly traded and the Issue may not result in an active or liquid market for the Equity Shares.</li><li>There is no guarantee that the Equity Shares issued pursuant to the Issue will be listed on the SME Platform of National Stock Exchange of India Limited in a timely manner or at all.</li><li>There is no existing market for its Equity Shares, and the company does not know if one will develop to provide you with adequate liquidity. Further, an active trading market for the Equity Shares may not develop and the price of the Equity Shares may be volatile.</li><li>The price of the Equity Shares may be highly volatile after the Issue.</li><li>You will not be able to sell immediately on the Stock Exchanges any of the Equity Shares you purchase in the Issue.</li><li>There are restrictions on daily movements in the trading price of the Equity Shares, which may adversely affect a shareholder's ability to sell Equity Shares or the price at which Equity Shares can be sold at a particular point in time. </li><li>The price of the Equity Shares may be volatile, which could result in substantial losses for investors acquiring the Equity Shares in the Issue.</li><li>Any future issuance of Equity Shares, or convertible securities or other equity-linked securities by the Company may dilute your shareholding and any sale of Equity Shares by its Promoters or members of the company Promoter Group may adversely affect the trading price of the Equity Shares.</li><li>Sale of Equity Shares by its Promoters or other significant shareholder(s) may adversely affect the trading price of the Equity Shares.</li><li>Rights of shareholders under Indian laws may be more limited than under the laws of other jurisdictions.</li></ul>

The Issue type of Thinking Hats Entertainment Solutions Ltd is Book Building - SME.

The minimum application for shares of Thinking Hats Entertainment Solutions Ltd is 3000.

The total shares issue of Thinking Hats Entertainment Solutions Ltd is 3429000.

Initial public offer of upto 34,29,000 equity shares of face value of Rs. 10/- each ("Equity Shares") of the company at an issue price of Rs. [*] per equity share (including a share premium of Rs. [*] per equity share) for cash, aggregating up to Rs. [*] crores ("Public Issue") out of which 1,80,000 equity shares of face value of Rs. 10/- each, at an issue price of Rs. [*] per equity share for cash, aggregating Rs. [*] crores will be reserved for subscription by the market maker to the issue (the "Market Maker Reservation Portion"). The public issue less market maker reservation portion i.e. issue of 32,49,000 equity shares of face value of Rs. 10/- each, at an issue price of Rs. [*] per equity share for cash, aggregating up to Rs. [*] crores is hereinafter referred to as the "Issue". The public issue and net issue will constitute 27.46 % and 26.02 % respectively of the post-issue paid-up equity share capital of the company. The Offer Price is Rs. 44 per equity share of face value of Rs. 10 each. The offer Price is 4.40 times of the face value of the equity shares. Bid cane be made for a minimum of 3000 equity shares and in multiples of 3000 equity shares thereafter.