D-Mart & Radio City IPOs – Grab Them
It’s gonna rain IPOs in March 2017 and investors had better gear up for the same. Music Broadcast Ltd & Avenue Supermarts are the 2 IPOs that will be launched next week.
Music Broadcast Ltd IPO – Play this Music
Music Broadcast Ltd popular as Radio City, operates radio stations stations under the “Radio City” and “Radio Mantra” brands. Radio City is the first private FM radio broadcaster in India. The company has grown its presence from four cities in 2001 to 37 cities as on February 15, 2017.
It is a subsidiary of the famous media company – JagranPrakashan. Its radio content typically comprises of RJ shows and film music. Radio City had over 49.60 million listeners in 23 cities, as on March 31, 2016, AZ Research suggested.
The domestic radio industry is expected to grow at a 17% CAGR over CY15-20 to Rs 4,360 crore, driven by commencement of new radio stations, increase in listenership in tier-II & tier-III cities and an overall increase in ad rates.
GreenEdge Wealth Services View
At the upper price band of Rs. 333 per share, it will trade at ~44x on FY16 earnings. Though not cheap, we recommend to subscribe to the IPO for 10% to 15% listing gains. However, given the huge demand for the IPO, there is a small probability of you getting an allotment.
Issue Details – Music Broadcast Ltd
| Issue Open Date | 6th March, 2017, Mon |
| Issue Close Date | 8th March, 2017, Wed |
| Issue Price (Rs.) | 324 to 333 |
| Market Lot | 45 (Retail investors should apply for 1 lot i.e. 45 shares only) |
| Minimum Application Size for Retail (Rs.) | 14,985 |
Avenue Supermarts Ltd IPO – Add this Unique Mart
This is hailed as the Big Bang IPO of the season. Avenue Supermarts Ltd, popularly known as D-Mart, operates a supermarket chain pre-dominantly across West & South India with a focus on value retailing.
The company is promoted by Mr. RadhakishanDamni who is hailed as a legendary investor and also appears on the 98th position on Forbes list of the wealthiest.
Despite deriving ~50% of revenues from low margin, fiercely competitive food and grocery segment, & operating through a brick-and-mortar structure, the company has recorded profitability by maintaining a low cost structure. Unlike other retailers, ~90% of D-Mart’s stores are located in properties owned by the company thereby keeping rental costs under control. It bears the unique distinction of being the only profitable retail player in its segment – D-Mart’s financials are far more superior to its competitors like Reliance Retail, Future Retail & Spencer’s.
GreenEdge Wealth Services View
At the upper price band of Rs. 299 per share, it will trade at 36x the annualized earnings in 9MFY17. We believe that the rich valuations are justified considering the strong revenue visibility in the long term, superior promoter pedigree and it being the only profitable retail player in its segment. We recommend to subscribe to the IPO; there could be 30% to 50% listing gains on this one. However, given the huge demand for the IPO, there is only 15-20% probability of you getting an allotment.
Issue Details – Avenue Supermarts Ltd
| Issue Open Date | 8th March, 2017, Wed |
| Issue Close Date | 10th March, 2017, Fri |
| Issue Price (Rs.) | 295 to 299 |
| Market Lot | 50 (Retail investors should apply for 1 lot i.e. 50 shares only) |
| Minimum Application Size for Retail (Rs.) | 14,950 |