Friday, March 3, 2017

IPO ANALYSIS : MUSIC BROADCAST : INVEST FOR LISTING GAINS


ISSUE DETAILS:

Issue opens / closes on

06-03/08-03-20117
Promoters
Jagran Prakashan
Business
Radio broadcasting

ISSUE SIZE

Rs 400 cr
FACE VALUE
Rs 10
PRICE Band
Rs 324 - 333
LISTINGS
bse,nse
BRLMs
ICICI sec
REGISTRAR
Karvy

Business:

Music Broadcast's Radio City is the first private FM radio station in India.  The presence radio stations have increased from four cities in 2001 to 37 cities as on February 15, 2017. At  present Rado city is in 12 out of the top 15 cities in India by population.


Objects of the offer:

The Offer consists of a Fresh Issue by the Company and an Offer for Sale by the Selling Shareholders.

 Proceeds received from fresh issue of equity will be utilised for :

 Redemption of Listed NCDs and ICDs.



Risks:

Advertisement is the main source of income and the company is  heavily dependent on continuous flow of advertisements at effective rates.

 Rely on third parties to source sound recordings that are broadcasted on their radio stations.

Change in Government’s policy on cross media ownership could have adverse implications.



           Financials:

For the six month period ended on September 30, 2016, the company generated a total revenue of Rs 138 cr, EBITDA of Rs 45 cr and net profit of Rs 29 cr.


For the fiscal year ended March 31, 2016, we generated a total revenue of Rs 245 cr, EBITDA of Rs 78 cr and net profit of Rs 42 cr.

EPS for the last 3 years:


March 31, 2014 5.80
March 31, 2015 11.23
March 31, 2016 9.95

Weighted average EPS 9.69

Six month period ended on September 30, 2016 (not annualised) Rs 6.61.
     
Valuations and recommendations:

The company is likely to report an EPS around Rs 11 for fy17, on the expanded capital. The offer is made at 30 PE, which is expensive.

However there could be listing gains in view of promoters track record and background.

INVEST.

1 comment:

  1. 10 Things to Know About MBL IPO - https://goo.gl/MqCCbm

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