Music Broadcast Ltd, the Jagran Group’s ‘free to air’ FM radio broadcaster which operates its radio stations under the brand ‘Radio City’, listed on the BSE on Friday at Rs 420, a premium of 26 per cent over its issue price of Rs 333. At the National Stock Exchange, it debuted at Rs 413, up 24 per cent over the issue price.
At 1.12 pm, the share was trading at Rs 376.70 on the NSE, while it was at Rs 377.40 on the BSE. The IPO, which opened for public subscription on March 6 and closed on March 8, was subscribed more than 39 times.
It may be noted that the IPOs of Music Broadcast Ltd and Avenue Supermarts Ltd have received an overwhelming response, which market experts believe will now potentially kick start the next wave of IPOs in the primary market this year.
“As more and more IPOs are lined up, they will suck the liquidity in the system which is in a way bad for secondary market. But so far no worries as the undercurrent of the market is strong,” said Jimeet Modi, CEO, SAMCO Securities, in a research note recently.
Music Broadcast Ltd’s Rs 489-crore closed on March 8 with overwhelming response across all categories. It got subscribed by as much as 39.23 times of the issue size. The portion reserved for QIBs (qualified institutional bidders) was subscribed by a whopping 39.78 times, while retail investors bid for nine times of the portion reserved for them, the stock exchanges data showed. Non-institutional high-networth individuals showed special interest in the issue, with the category getting subscribed by a mind-boggling over 109 times of the reserved size.
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Last week, YES Securities recommended investors to “Apply” for the IPO of Music Broadcast Ltd, citing attractive valuations and healthy financials. In its report it said MBL has grown its revenues at a CAGR of 19% over FY13 to FY16 while its bottomline has grown at a CAGR of 54% during the same time. Its peer Entertainment Network India Ltd has clocked a CAGR of 14% in both revenues and profits during the same period.
Angel Broking also recommended a ‘Subscribe’ on the issue, citing better margin and ROE profile than its comparable peers. “In terms of valuations, the pre-issue P/E works out to 25.2x its annualised 1HFY2017 earnings (at the upper end of the issue price band), which is lower compared to its peers (ENIL is trading at 79.5x its annualised 1HFY17 earnings). Also, MBL’s EV/sales multiple 6.2x, works out to be at discount to ENIL’s 8.2x. On EV/EBITDA front too, Radio City’s issue appears to be attractive 18.7x v/s. ENIL’s 37.4x. Moreover, MBL has a better margin and ROE profile than its comparable peers.”