Godrej Properties, the real estate arm of the 111-year old Godrej Group, will pay crores for its pre-IPO campaign on television.
NEW DELHI: Godrej Properties, the real estate arm of the 111-year old Godrej Group, will pay crores for its pre-IPO campaign on television during the recently concluded DLF Indian Premium League cricket tournament.
The payment for advertisement blitz would be in addition to the royalty which the flagship company Godrej Industries will charge from the its real estate outfit for using the Godrej logo.
In a run up to the initial public offer (IPO), the Godrej Properties came up with extensive publicity campaign on television during the popular IPL cricket matches which concluded on June 1.
Godrej Properties, which is proposing to come out with a public offer of 94.30 lakh equity shares of Rs 10 each at a premium to mop up about Rs 500 to Rs 600 crore, would pay a minimum of Rs 4.23 crore as its share in the advertisement campaign during the IPL matches, the draft prospectus filed with the market regulator SEBI said.
"Godrej Industries Limited has requested our Company to make payment for Rs 42.33 million pursuant to the advertising benefits availed in relation to the DLF IPL under the Tripartite Agreement proposed to be entered between MSM Satellite (Singapore), its agent, Madison Communications and the Godrej group of companies," the draft prospectus said.
In addition, the Godrej Properties will also be paying a royalty at the rate of 0.5 per cent of its annual turnover to the flagship company Godrej Industries for using the Godrej logo.
Godrej Industries has followed the footsteps of Tatas and other business houses in charging royalty from other arms for use of company's logo.
The brand and trademark Godrej and the associated logo, as per the draft offer document, has been assigned by Godrej & Boyce Manufacturing Company to Godrej Industries Limited.
The Godrej Industries through an agreement with its real estate arm last month, granted Grodej Properties the non-exclusive right to use the trademark and logo on a payment of royalty of 0.5 per cent of the gross turnover.
As per the terms of the agreement, Godrej Properties would have to pay the royalty amount within two months of the close of the each financial year.
The agreement, which would remain valid for five years, would continue till the Godrej Industries holds 26 per cent of the equity in Godrej Properties.
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