Mumbai: Shares of Radio City FM’s operator, Music Broadcast Ltd made a strong debut on the stock markets on Friday with listing over 26% premium after its issue subscribed 39.3 times for its Rs400 crore initial public offer (IPO) last week.
The stock opened and touched a high of Rs420 a share. The scrip, however, pared some gains and closed at Rs373.15 on the BSE, up 12.06% from its issue price of Rs333. It hit a low of Rs 368 a share, in intraday. India’s benchmark Sensex index rose 0.21% to closed at 29,648.99 points.
Analysts at Prabhudas Lilladher in a 3 March report said that the company has a 12-13% market share and is expected to report revenues of Rs267 crore for financial year 2017, a compounded annual growth rate (CAGR) of 17% for the past five years.
“We feel the pricing is reasonable considering strong parentage, professional management, debt-free Balance Sheet post IPO, good growth opportunity & limited Equity offering,” the Prabhudas Lilladher report added.
For the six months ended 30 September 2016, the company generated a total revenue of Rs138.21 crore, and recorded an Ebitda (earnings before interest, tax, depreciation and amortisation) of Rs45.51 crore and net profit of Rs29.76 crore. For the fiscal year ended 31 March 2016, it generated a total revenue of Rs245.51 crore, Ebitda of Rs78.59 crore and net profit of Rs42.51 crore.
The issue was open during 6-8 March and the portion reserved for high net-worth individuals was subscribed 109 times, while the institutional investors and retail investors categories were subscribed 39.7 times and 9.1 times, respectively.
On 3 March, the company raised Rs146.5 crore by allotting shares to anchor investors as part of the so-called anchor book allocation. Shares were allotted to anchor investors at Rs333 each, the upper end of the IPO price band of Rs324-333 per share.
Investors who participated in the anchor book allocation include funds from financial institutions HSBC, Nomura, Franklin Templeton, DSP BlackRock, Reliance Capital, ICICI Prudential, HDFC Standard Life Insurance and Birla Sun Life Insurance, among others.
Music Broadcast plans to use the proceeds of the share sale to pare debt and for general corporate purposes.
Music Broadcast is promoted by Jagran Prakashan Ltd, a media group with interests in print, radio, digital, out-of-home and brand activations. Jagran publishes 10 print titles in five different languages across 13 states in India and has over 400 editions and sub-editions. These include Dainik Jagran and Inquilab.
Radio City, which started operations in four cities in 2001, is present in 37 cities, including Bengaluru, Mumbai, Chennai, Pune, New Delhi and Hyderabad. As on 31 March 2016, it reached more than 49.6 million listeners in 23 cities, as per market research and consulting firm AZ Research, the firm said in its draft IPO prospectus.
HT Media Ltd, the publisher of Hindustan Times and Mint, competes with Music Broadcast in some markets