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Saturday, March 4, 2017

Music Broadcast Ltd IPO at a Glance


Issue Highlights

Issue Period
6/3/17-8/3/17
Price Band (Rs.)
324-333
Issue Size(shares)
1,20,12,012
Issue Size (Rs. crore) #
488.5
Issue Type
100% Book built
Face Value (Rs.)
10
Listing
BSE,NSE
Industry
FTA Radio
Registrar
Karvy Computershare
Minimum Bid Quantity
 45 shares
Maximum Retail Subscription (Rs.)
Rs. 1,94,805 (13 lots)
BRLM
ICICI Securities
# derived figure

Issue Details


Offer for Sale:  26,58,518 equity shares
Fresh Issue: Rs. 400 crore (1,20,12,012 equity shares #)
Equity Shares Outstanding Prior to the Issue:  4,50,42,767
Equity Shares Outstanding After the Issue #:  5,70,54,779
# derived figure

Objects of the Issue

The proceeds from the issuance of the fresh issue shall go towards the redemption of NCDs.
(1)   Redemption of listed NCDs : Rs. 200 crore
(2)   Early redemption of JPL NCDs: Rs. 82.74 crore
(3)   Repayment/pre-payment of JPL ICD: Rs. 15.5 crore
(4)   General corporate purposes & offer related expenses: NA

Industry Profile

In Indian Media and Entertainment Industry, Radio has been growing at an CAGR of around 15 % for past 5 years with overall Radio industry being worth 23 billion rupees. Advertising volume of the Radio industry is being growing at a 5 year CAGR of 10 %.
With the soaring internet penetration coupled with rising smart phone density, internet radio -which provides choices like genre etc, is expected to open newer vistas in ad revenues

Company Profile

Music broadcast limited is a subsidiary of JPL (Jagaran Publication Limited) and the company operates its radio station under the brand name of Radio City (and Radio Mantra) and presently operates in 29 cities.
With its presence in 12 out of top 15 Indian cities, the company reaches out to around 5 crore listeners. The radio services being Free to Air Advertising is the main source of revenue for the company and ads come through various ad agencies. The advertising volume of the company is growing at an CAGR of 12.5 % which is highest among its peers and the industry average.
Through planet radio city, the company operates 31 web radio stations in six languages and reaches out to around 1.22 crore listeners.
The company is well poised to transform from a pure radio company to an audio entertainment company. 

Risks & Threats

(1)    FTA Radio is a highly competitive industry and the competition is supposed to increase in future
(2)    Rising prowess of ‘Internet Radio Mobile App for online radio’ from other players might lower its radio listenership and thus reducing its revenue
(3)    Presently, Profit appears high due to limited tax liability and in future MAT credit entitlement shall be discontinued

Financial Profile #

Parameter
FY 16
Price-to-Earnings Ratio
44.7
Net Profit Margin (%)
17.31
Return on Capital Employed (%)
22.71
Return on Equity (%)
39.58
Total Liability to Net worth
3.52
Price to Book Value
17.69
EV/EBITDA
20.29
# using FY 16 data at the upper end of the price-band



Comparison with the listed Peer #


NPM (%)
ROCE(%)
ROE(%)
EV/EBITDA
PE
RBL
17.31
22.71
39.58
20.29
44.7
ENIL
19.65
12.79
13
21.42
64.59





# moneycontrol data




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