HINDUSTAN MEDIA VENTURES LIMITED

[sunil]

Hindustan Media Ventures (HMVL) is one of the leading print media companies in India being promoted by HT Media. HMVL publishes and prints 'Hindustan', the third largest daily newspaper in India, it sells 18 lakhs copies everyday and has a readership it has 9.9 million readers, according to IRS, Q1 2010.

At the indicated issue size of Rs 2700 mn, the company will issue 15.43 and 16.67 mn shares at the higher and lower end of the price band respectively. Post issue the value will be Rs.12 bn to Rs.13 bn. As this issue is a fresh issue in entirety, all the proceeds will come into the company and will be used to repay debt completely and for investment in new facilities as well as up gradation of older facilities The issue opens for subscription on July 05, 2010 and closes on July 07

[cardbhai]

HSBC InvestDirect has the Following Recommendation on the IPO,

The company will trade at a valuation of 26.6x to 28.0x (with debt on its books) on the earnings of FY10, which seems to be on higher side of the valuation range as compared to its listed peers in the industry. The company will trade at a valuation of 23.3x to 24.5x (without debt on its books) on the earnings of FY10, which is on a comfortable zone of the valuation range as compared its peers.  The company, with estimated market capitalization of Rs 12,655mn  on the upper end of price band (debt free status due to loan pre-payment), looks good in terms of strong foothold in its key markets, future growth prospects and strong management. We therefore, recommend Subscribe on the issue.

[chetan]

PINC Securities has the following View on the Offering

The initial public offering of HMVL has opened for subscription on 5th Julyand will close on July 7. The offering of 16 mn shares constitutes 22.5% of the post issue paid-up equity capital. Peers such as Jagran Prakashan and D B Corp, though larger in size, but with debts on their books, are presently ruling at PE multiples of 22-24 times, based on historic earnings (2010). The normalized EPS of HMVL for FY10 on the fully diluted equity works out to Rs.6.1. The company will trade at a valuation of 26.5x to 28.0x on the earnings of FY10, which is not cheap compared to the price at which the peers of HMVL or even HT Media are quoting at. Hence, we recommend Neutral rating for this IPO

[chetan]

SPA Securities has the following View on the IPO,

At the upper band of Rs 175, the stock is available at a P/E & P/BV multiple of 28.1x and 3.7x based on its FY10 EPS of Rs 6.2 and post issue BVPS of Rs 47.3. Looking at the valuation parameters, the company seems to be at par with its peers. However its financials for FY10 are not comparable with its financial information for previous years. But being part of the HT Media group will help it to expand & grow its business. We recommend ‘Neutral’ to the issue.

[sunil]

Alchemy has a Subscribe Recommendation,

Steady increase in readership for Hindustan along with favourable tailwinds for the Hindi print media business will ensure robust ad revenue growth for HMVL. Further the funds raised from the IPO will make HMVL debt free (reducing interest cost) and fuel its expansion plans, thereby improving earnings.
At the lower and the upper end, the scrip is available at 14.6x and 15.5x its FY12E earnings, respectively. While its peers Jagran Prakashan and DB Corp are currently trading at 16.2x and 15.9 x FY12E earnings, respectively. We estimate a fair value of Rs14.8bn for HMVL, based on 18x FY12E earnings (our exit multiple for Jagran Prakashan), leaving an upside of 16% from the upper price band. We recommend Subscribe to the issue.