Music Broadcast IPO (Radio City IPO) Allotment Status – MBL IPO Details & Review

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The Shares are expected to be listed on Friday. You can check the allotment status for Music Broadcast IPO (Radio City IPO) at the link below:

https://kosmic.karvy.com:81/ipotrack/

 

 

Update: 7th March (Day 2) –  The IPO issue is over-subscribed 2.1 times

  • retail investors was subscribed 3.6 times, 
  • high net-worth individuals’ category was subscribed 24%.
  • institutional investor category saw a subscription of 1 times,

Music Broadcast, the operator of FM channel Radio City has kicked off its Rs 500 crore IPO on Monday 6th March 2017.

Issue Details

  • IPO Open :  6th – 8th March
  • Issue Price band:  Rs 324 – 333
  • Issue Size:  approx Rs 488 crore
  • Market lot : 45
  • Max Shares for Retail – 585 at cutoff price
  • Listing – Expected ot be listed on BSE & NSE on 17th March

IPO Issue Allocation

  • Qualified institutional buyers (QIBs) –  50% per cent of the total issue size.
  • Non-institutional investors (NIIs) –  15% per cent of the issue size.
  • The retail quota limit in the issue = 35% 

Objective of the issue:

Proceeds from the IPO will be used to clear debt. Post issue, Jagran Prakashan’s stake in Music Broadcast will be reduced to 71% from 89%.

Background:

Music Broadcast is the first and oldest private FM radio broadcaster in India. The company started broadcasting from four cities in 2001 and has grown its presence to 37 cities as on 15 February.

The company operates radio stations under the name Radio City across the country.

Music Broadcast has presence in 12 out of 15 most populated cities in India. Radio City had over 49.60 million listeners in 23 cities as of March 31, 2016. It owns 39 private FM radio stations.

Positive aspects of the company are its higher advertising rates, healthy operating margins and strong listenership base.

Promoters :  89.4% is owned by Jagaran Prakashan

Competitors :  ENIL

Anchor Investors: 

The company has raised Rs 146.56 crore from anchor investors.  The broadcaster sold 44.01 lakh shares to 15 anchor investors on Friday. These investors included HSBC, Nomura, Franklin India, Morgan Stanley, DSP Blackrock and Reliance Mutual Fund, among others. The anchor portion, which is 30% of the issue size, was allotted at Rs 333 apiece.

Financials:

The company’s operating revenues and Ebitda grew at 18.9% and 32.4% CAGR in FY12-16 to Rs 232.3 crore and Rs 78.6 crore, respectively.

For the six months ended September 30, the company generated operating revenues of Rs 136.8 crore and Ebitda of Rs 45.5 crore.

Valuation as compared to its peers:  Attractively Priced

  • The pre-issue price to earnings (P/E) multiple works out to 25.2 times the company’s annualized first half 2017 earnings (at the upper end of the issue price band), lower compared to its peers. Entertainment Network India (ENIL), is trading at 79.5 times its annualized first half of FY17 earnings.
  • Music Broadcast is offered at a PE of 33.4 times its FY17E EPS of Rs 10 and FY17E EV/Ebitda of 19.3 times, which is lower to its peers.
  • Music Broadcast EV/sales multiple at 6.2 times, works out to be at discount to ENIL’s 8.2 times.
  • On EV/EBITDA front too, Radio City’s issue appears to be attractive 18.7 times compared to ENIL’s 37.4 times.
  • Moreover, MBL has a better margin and return on equity (ROE) profile than its comparable.
  • Radio City enjoys healthy 34% operating margin, much better than ENIL’s 30% margin in FY2016
  • Radio City’s advertising volumes have grown at a compound annual growth rate (CAGR) of 12.5% over FY2011-16, while, ENIL reported 9% CAGR in advertising volumes during the same period.
  Music Broadcast ENIL Zee Media
Radio Station Radio City Radio Mirchi 92.7 Big FM
Radio Stations (no.) 39 42 45
Listners 50 million 60 million 43 milion
H1FY2017 Annualised revenue (in crores) 274 481 284
H1FY2017 Annualised EBIDTA (in crores) 94 139 116
EBIDTA Margin 34% 29% 41%
H1FY2017 Annualised PAT (in crores)      
PE Ratio  based onH1FY2017 Annualised 25X 69X  
       
       

Brokerage Recommendations:

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Should you consider investing:   Yes

The valuation looks attractive as compared to its listed peer (ENIL). So on that basis, you can consider to invest for long term.

Disclaimer:  The articles or analysis on this website should not be constituted as Investment advice. Please consult your financial advisor before making any investments.

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