DB Corp, publisher of Hindi daily Dainik Bhaskar, closed the first day of trading at Rs 265.90, a premium of 25.42 per cent over its issue price of Rs 212. The share touched an intra-day high of Rs 274 on both BSE and NSE. The IPO, which was intended to raise between Rs 235 crore and Rs 270 crore at a price band of Rs 185-212, was oversubscribed by 40 times.
The market capitalisation of the company on Day one was said to be higher than other media companies in the category like HT Media and Jagran Prakashan. “It has been a very good listing for DB Corp. The stock is likely to trade at premium valuation because of its presence in more lucrative markets like Madhya Pradesh, Rajasthan and Gujarat,” said Ritesh Poladia, Assistant Vice President - Research, Dolat Capital.
Although analysts also added that an impressive listing of DB Corp did not by any way lower the potential of Jagran Prakashan, which has shown good results till now. “One cannot assign a lower multiple to Jagran Prakashan, which has a proven track record. Both the companies cater to a market size of Rs 20 billion. And if investors have shown so much confidence in a new company like DB Corp, the price of Jagran Prakashan will also see an upside,” explained a market analyst.
Anand Shah, Senior Research Analyst, FMCG & Media, Angel Broking, added here, “The valuation of the stock on the first day of listing has been higher than our expectations. It is trading currently on the upper side of its value. On a relative basis, Jagran Prakashan is more attractive as it has shown good results in the past.”
Analysts feel that regional media on the whole had a lot of potential. “Successful listing will have a constructive rub-off effect on listed peers like Jagran Prakashan and HT Media, which have seen some price appreciation over the last one week,” said Mihir Shah, Research Analyst, Alchemist. “More importantly, this listing also suggests that the regional print sector is holding much more promise than national players because of the sheer growth potential in regional platforms, the same was reflected in the recent IRS 2009 R2 figures,” he further said.
The recently released IRS 2009 R2 results by MRUC reflected that the AIR (Average Issue Readership) of English dailies did not show growth, while at the same time the AIR of Hindi and vernacular dailies showed positive growth.
Girish Agarwal, Non-Executive Director, DB Corp, at the time of the IPO press meet had mentioned that the future of print media lay in Tier II and III cities. The company has said that retail investors had shown faith on their projections and understanding of regional markets.
DB Corp publishes seven newspapers and 48 editions in three languages (Hindi, Gujarati and English) across 11 states in India.