(By Ashwin Mohan)
“Advertising can deliver returns disproportionate to investments . Attempt to deliver this to clients, every time.”
So said legendary ad guru RK Swamy who founded the pioneering agency bearing his name. Now, the company, which opened its doors for business in Chennai 50 years ago, is looking to deliver returns—by selling shares.
RK Swamy Advertising Associates has initiated the process to unlock value and launch an initial public offering (IPO), setting the stage for one of the most unusual stock market debuts of the year, multiple people with knowledge of the matter told Moneycontrol.
If the listing plans of the company fructify, it would be the first ever IPO in India by a major integrated marketing services group.
The firm, which morphed into RK Swamy BBDO, and is now known as the RK Swamy Hansa Group, operates across four key service areas —advertising, interactive and media, market research, brand activation and data analytics.
“The deal is on and was kicked off recently. RK Swamy Hansa Group has mandated investment banks IIFL Capital, Motilal Oswal Investment Advisors and SBI Capital as advisors for the same,” said one of the persons cited above.
A second person confirmed the above syndicate of bankers and said that as of now, the firm’s plan was to raise around Rs 500 crore via the IPO which would be a combination of primary (Rs 150- Rs 200 crore) and secondary issue of shares (Rs 300 crore).
He added that no final call had been taken on the quantum of the IPO which could change later based on market conditions.
According to a third person, the proposed listing would facilitate an exit for a clutch of NRI investors in the firm who own around 16 percent stake.
“The IPO would also help to raise growth capital for expansion, especially in overseas markets,” this person elaborated.
“Such a composite business is not listed anywhere. It goes far beyond advertising. If plans proceed, this deal will open up avenues for others to start thinking on similar lines. It is likely to unlock opportunities for others in the space who have the scale and are keen to raise capital,” said a fourth person.
Mobile advertisement firm Affle India and digital analytics firm Latent View are two listed players in related segments.
All the four persons above spoke to Moneycontrol on the condition of anonymity.
In response to a detailed email query sent to RK Swamy Hansa Group , Group CFO Rajeev Newar replied saying ” no comment.” Moneycontrol could not elicit an immediate comment from IIFL Capital , Motilal Oswal Investment Advisors and SBI Capital.
According to his LinkedIn profile, in an earlier stint, Newar led the transition of Chalet Hotels from a private to a listed entity post an IPO of Rs 1641 crores.
THE RK SWAMY HANSA GROUP STRATEGY
In July 2022, RK Swamy and BBDO (a leading network of the global Omnicon group) announced parting of ways after an alliance that lasted 37 long years.
Under a new agreement, RK Swamy bought out BBDO’s stake in the joint entity and BBDO bought out R K Swamy’ stake in BBDO India.
“The reason why we decided to go our separate ways was to integrate our offerings (RK Swamy Hansa Group) as one,” Srinivasan Swamy, chairman and managing director of RK Swamy Hansa Group, told Storyboard18 in an interview dated July 12, 2022. Sibling Shekar Swamy is the Group CEO.
“BBDO was only in the advertising business and offered services like media and creative. And we were serving the same ecosystem of marketers with services like marketing analytics, media research, events, health care communication, public relations, outdoor, AdTech, MarTech, etc.
So, the multiple clients we have can also be served across systems in a unified structure to help us deliver better than a structure where BBDO’s interest would be in one small segment. And both the partners agreed that we function separately in an amicable manner,” Swamy said in the interview adding that the consolidated turnover of RK Swamy Hansa Group was 100 million dollars.
According to its website, the RK Swamy Hansa Group has offices spanning seven cities – Bengaluru, Chennai, Delhi, Hyderabad, Kochi, Kolkata and Mumbai. Complementing this is a field network in 11 other cities. Hansa Marketing Services has US offices in Chicago, Illinois and Portland, Oregon.
“We are among the few that can truly deliver Integration. Our Creative, Media, Digital, Events and Retail teams work under one Management,” the website says.
The firm has worked for over 200 large clients in India, including the Government of India and institutions like the LIC, RBI and SBI. In the private sector, its clientele includes the likes of Hawkins ( on board since 1985), Havells, Lloyd, TAFE, IndusInd bank, Shriram Group, Himalayas, MagicBricks, Tata Steel, Mahindra & Mahindra, Gemini Oils and others.
AND THAT’S HOW IT STARTED FOLKS!
The advertising career of the group’s founder late RK Swamy (referred to as the Grand Old Man of Indian Advertising by Sam Balsara) spanned 63 years and began in 1940 when he joined J Walter Thompson in the Indian Languages department. Post a stint in Calcutta for several years, he returned to Bombay.
In 1955, Swamy moved to Madras to start a new office of J Walter Thompson, which kickstarted the entire advertising industry in South India. After 33 eventful years, R K Swamy left JWT while he was a senior most director, and the company had become established as a leader in the business.
At the age of 50, he founded R K SWAMY Advertising Associates and within seven years, it had spread its wings across the top five cities of India. The firm struck a partnership with the BBDO Worldwide Network in 1986, long before such tie-ups became the trend in the industry.
Commenting on the domestic advertising market, a Founding Fuel article titled ” The hare and the tortoise” dated July 28, 2022 said, “Most home-grown Indian advertising and communication groups have thrown in the towel and sold out to large international networks like WPP, Publicis, Dentsu and Omnicom, with the exception of the R K Swamy Hansa group and perhaps, Madison Worldwide, founded by the evergreen Sam Balsara. The original founders at Ulka, Trikaya, Mudra, Rediff and Chaitra have one by one exited from the scene.”
Read More: Why are independent advertising agencies aiming to go public?