Is it another good IPO opportunity @ 185-210 specially for retail?
DB Corp Fair Value 240-250:Udayan Mukherjee Money Control
I don’t think DB Corp is a bad story. It
is the largest vernacular play that you have in the print space. It is
an old group, everybody knows Dainik Bhaskar and is diversified, it’s
not just a one state pony; it has got its leg in multiple states with
potential of growth. Its true that advertisers seem to curiously not
like the vernacular press as much, but the only segment of print media,
which is growing in terms of advertising albeit on a lower base is the
vernacular media.
I think it’s a reasonable growth story,
I know people across the world do not like print media but I think
India is a little lower on the edge of the media curve than the rest of
the world, so it looks like a stable enough story.
They are probably expected to do about
Rs 11 earnings this year and maybe Rs 12 next year. On Rs 12 would you
give it something like 20 PE multiple, given that it has reasonable
growth of 15-20%, I would say yes. So maybe fair value for DB Corp is
the zone of Rs 240-250 that ballpark figure and the higher end of the
offer band is about Rs 212, so I think they have left about 10-15% on
the table. I wouldn’t be surprised if it does far better than JSW
Energy or Godrej Properties in terms of subscription. They are asking
for just under Rs 4000 crore market cap, for a business which will do
Rs 1,200 crore of revenues next year and with reasonable profitability.
So there are not too many stocks in that space, I wouldn’t be surprised
if DB Corp does better that last couple of predecessors in the primary
markets.
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