Hindustan Media lists at premium on debut
Hindustan Media Ventures Ltd's (HMVL) 2.7-billion-rupee IPO made a sparkling debut on Wednesday, rising as much as 13.6 per cent, continuing the trend in recent listings this year.business Updated: Jul 21, 2010 14:27 IST
Hindustan Media Ventures Ltd's (HMVL) 2.7-billion-rupee IPO made a sparkling debut on Wednesday, rising as much as 13.6 per cent, continuing the trend in recent listings this year.
At 11.53 am shares in HMVL, a unit of HT Media, were trading at 185.4 rupees, up 11.7 per cent, as investors bet on the newspaper publisher's strong presence in the Hindi heartland to drive future growth.
The shares rose to as much as Rs 188.65 in early trades, after listing at Rs 170, up about 2.5 per cent to the issue price of 166 rupees.
"If you compare with peers DB Corp and Jagran Prakashan, this company looks good. Their readership in Bihar and Jharkhand is good and there is an opportunity to grow in that market as well," Amit Kumar, analyst with Kotak, said.
"We do feel some of these Hindi and regional players are lower-priced and growth is expected to be much stronger than the industry," he added.
The company plans to use the proceeds for expanding presence in new markets and for repayment of debt. It also plans to set up new publishing units for printing and publishing new editions of its Hindi newspaper Hindustan.
Investors are betting on HMVL, which also publishes Nandan and Kadambini in Hindi, on high earnings growth, rich parentage and strong position in the regional print markets, analysts said.
Hindustan has a firm presence in key Hindi markets of Bihar and Jharkhand and is the fastest-growing daily in Uttar Pradesh, the largest Hindi market in India, since its launch in 2007, analysts said.
HMVL's IPO -- the third media listing this year after Hathway Cable and DB Corp -- was subscribed 5.34 times. In FY10, it posted a net profit of nearly 140 million rupees on total income of 1.7 billion rupees.
Analysts see higher growth opportunities for regional language players on better advertising revenue outlook as corporate spending increases in rural areas and with increased government thrust on rural growth.
"We believe HMVL is one of the better players in the Indian regional print media and is likely to deliver a better growth in the coming years," brokerage Sharekhan said in a pre-IPO note.
"However, the increasing competition from the large players like Jagran Prakashan and DB Corp could be a key risk to the profitability of the company," it added.
Edelweiss Capital and Kotak Mahindra Capital are book running lead managers for the issue.