Monday, July 5, 2010

IPO ANALYSIS: HINDUSTAN MEDIA VENTURES LIMITED – SOARING CIRCULATION, STRONG BRAND EQUITY - INVEST




One  of  the  leading  print media  company, which publishes, among others, ‘Hindustan‘,  the  third  largest  daily  newspaper  in  India,  in  terms  of Readership,  with  a  Readership  of  9.3  million  readers. ‘Hindustan‘  began publication in 1936, during freedom movement and has been  one  of  India‘s  eminent Hindi  newspaper  dailies  for  over  70  years.  ‘Hindustan‘  has  the  largest Readership in key Hindi-speaking markets of Bihar and Jharkhand, with a strong and growing presence in Delhi NCR and the states of Uttar Pradesh and Uttarakhand. It is one of the fastest growing Hindi daily newspapers in India.

‘Hindustan‘is presently printed at 16 locations in the states/regions of Uttar Pradesh, Bihar, Jharkhand, Uttarakhand, Punjab and Delhi NCR. The distribution of newspapers takes place through a multi-tiered network of agents and vendors. 

They  also  publish  two Hindi magazines,  ‘Nandan‘,  a  children‘s magazine,  and  ‘Kadambini‘,  a  general interest  magazine.  The company also operates the website, www.livehindustan.com, which focuses on providing news in Hindi with regional content.

ISSUE DETAILS:

ISSUE OPENS/CLOSE ON
05-07-10 / 07-07-10

ISSUE SIZE/FV

RS 270 CR/ RS 10

PRICE BAND

RS 162-175


BRLMS
EDELWEISS,KOTAK MAHINDRA

PROMOTERS

H T MEDIA LIMITED
  

FINANCIALS - RS IN CRORES

08
09
31-12-09

REVENUE

16.85

17.73

52.14

NET PROFIT

0.28

0.19

3.57

EPS

0.70

0.28

5.11

RONW

2.54%

1.74%

21%

OBJECTS:

The objects of the Issue are to raise funds for (1) setting up new publishing units (Rs 66cr) (2) upgrading existing plant and machinery (Rs 55cr) (3) prepayment of loans (Rs153cr)

CHALLENGES:


The  Indian  newspaper  and  magazine  industry,  particularly  the  Hindi  newspaper  and  magazine industry,  is  intensely competitive.  In each of the markets, the company faces competition primarily from other newspapers and magazines for circulation, readership and advertising.  In  addition,  there is competition  from  other  alternative  forms  of  media  including,  but  not  limited  to,  television broadcasters,  magazines,  pamphlets,  flyers,  radio  broadcasters  and  internet  websites.  These other forms of media compete with newspapers for advertisers and for the time and attention of the readers. Ad-spend  by  the  advertisers  and  the  ability  to  attract  new  advertisers  is  influenced  largely  by  the circulation and  readership,  the geographical  reach,  readership demographics of the newspapers  and the preference of advertisers  for one media over another.  Pricing in the short term may be affected by the Circulation of the newspapers and magazines among the readers which is an important source of revenue for the  Company  since  its  derives  significant  revenues  from  subscriptions  and  sales.  In addition, circulation and readership significantly influence ad-spend by advertisers and the advertising rates in the newspapers. Circulation and readership is dependant on the quality and reach of the publications and the loyalty of the existing readers. Circulation  in  the  Indian market  is  also  largely  affected  by price and,  therefore,  the circulation of the newspapers may be adversely affected  if the company  fails  to meet any price competition.

Changes in technology may render the current technologies obsolete or require the company to make substantial capital investments.

STRENGTH:

  • Hindustan – Strong brand recognition.

  • Emerging as a leading Hindi daily with leadership in key markets.

  • Ability to successfully launch ‘Hindustan’ daily - in new markets.

  • Strong relationship with Advertisers.

  • Ability to provide local, national and international news with quality editorial content. 

  • Credible editorial team. 

  • Modern and advanced printing and technology infrastructure. 

  • Synergies with HT Media Limited. 

  • Strong management team. 
 

RECOMMENDATIONS – INVEST


CRISIL HAS AWARDED GRADE - 4 FOR THE IPO, INDICATING ABOVE AVERAGE FUNDAMENTALS.

HMVL is a professionally run company and focuses a lot on adopting good corporate governance practices. It is a subsidiary of HT Media which has been acknowledged as one of the top 25 companies adopting good corporate governance practices for 2009 by the Institute of Company Secretaries of India. HMVL draws its governance practices from HT Media itself and is expected to have similar robust board practices. HMVL has a completely different senior and second line  of management.









2 comments:

  1. Hi
    I liked the way of your writings. Good compilation, thanks…..

    ReplyDelete
  2. Ipo will get premium. Ansari.

    ReplyDelete