Recently floated on AIM, EROS looks set for fast growth in 2007. EROS buys the rights for the distribution of Bollywood movies in all formats (cinema, DVD, television etc.) usually for a cash lump sum on completion of the movie with no commission payable to the producer and also usually alongside the right of first refusal when the contract is up. This business model is high-margin (58.3%) and provides a steady income stream. Bollywood films are becoming increasing popular internationally and this is coupled with the embryonic state of the Indian cinema industry (there are only 12,000 screens for a population of over 1 billion and 90,000 screens are expected to be installed within the next 5 years). Profits for this financial year are expected to climb 61% to $32.4 million. EROS also benefits from being registered in the tax haven of the Isle of Man.

Shares jump as EROS International gives big hint on USA Listing

US listing finally happening although slightly disappointing the AIM listing goes. I'm sticking with it across the pond as further growth and more appetite to follow IMO.

Sharp move higher on US IPO price range annoucement ($15-$17 each). Potential for much stronger rise here.

1 for 3 consolidation proposed, which I calculate the IPO range to be c. 310p-350p equivlalent, depending what GBP/USD rate you use.

So we've picked up some since that earlier annoucement, currently up 17% to 297p. Still a lot more value here before the IPO in my opinion. Should be heading to a minimum of 310p for fair value?

Heading higher again though would appear to be further upside ahead of US IPO and AIM delisting. I expect to see greater appetite in the US with greater alignment with Hollywood.