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TV Today has a spectacular debut on the bourses, lists at a premium of 132%

TV Today has a spectacular debut on the bourses, lists at a premium of 132%

Author | exchange4media Mumbai Bureau | Saturday, Jan 17,2004 7:42 AM

TV Today has a spectacular debut on the bourses, lists at a premium of 132%

TV Today Network (TVTN), which runs the news channel Aaj Tak and Headlines Today, made an excellent debut on the domestic bourses on January 16, 2004. The scrip listed at a price of Rs 225, a huge premium of 132 per cent at the Bombay Stock Exchange (BSE) over its issue price of Rs 95.

TVTN’s listing at the BSE, which was marked by the customary Bell Ringing Ceremony, was attended by Aroon Purie, Chairman and Managing Director, TVTN, Anil Mehra, Director, TVTN, G Krishnan, ED & CEO, TVTN, Dr. Manoj Vaish, ED & CEO, Bombay Stock Exchange along with the Book Running and Co-Book Running Lead Managers.

Frenzy of TVTN listing passed on to Zee TV…

The frenzy over TV Today’s listing was passed on to media conglomerate, Zee Telefilms. Although the scrip closed the day on BSE lower by 2.86 per cent at Rs 156.05, it performed well in the morning trades. It advanced 2.55 per cent to Rs 164.75 before touching a high of Rs 165.85 in the morning trades because of bargain hunting.

Volumes amounted to over 12.45 lakh Zee Telefilms shares on BSE within one hour of trading on the BSE. Zee Telefilms has so far moved in the range of Rs 161-Rs 165.40 on the exchange.

Today's rise seems a continuation of a recent trend. The scrip has now risen 4.53 per cent from Rs 157.60 on January 14, 2004. On Thursday, 15 January 2004, despite the drop by 130 points on BSE, Zee Telefilms held fort, gaining 1.93 per cent to Rs 160.65. Considering a longer period, the stock of the media major has now risen 174 per cent from Rs 60.15 on March 31, 2003.

Equity analysts and market men say that the firmness in Zee’s scrip came because of an impressive debut by TV Today on BSE. The TV Today Network was listed at Rs 220 on BSE today, at a huge premium of 132 per cent to the IPO price of Rs 95.

According to the market, as a result of the huge premium for TV Today, players have started accumulating media major Zee Telefilms as well, which at the current levels is considered cheap compared to TV Today.

However, the positive triggers of TVTN did not pass on to the other media scrips like Balaji Telefilms, Mukta Arts and Pritish Nandy Communications (PNC).

Mukta Arts, PNC and Balaji Telefilms closed lower on the BSE. While Balaji Telefilms closed the day lower by 5.14 per cent at Rs 103.25, Mukta Arts and PNC closed the day lower by 3.51 per cent and 8.22 per cent at Rs 71.50 and Rs 49.15 respectively.

The TVTN scrip closed the trading day at Rs. 181.35. Large volumes were traded at the counters. On the BSE, about 1.29 million TV Today shares exchange hands, while on the NSE the volume stood at 2.24 million.

The Initial Public Offer (IPO) of 1.45 crore equity shares of Rs 5 each had price band of Rs 95 through the 100 per cent book-building route. The issue, which opened on December 18 and closed on December 27, was over-subscribed more than 36 times. The television news major has raked in a total of Rs 140 crore through the IPO.

Media analysts are gungho about the scrip. They expect it to be one of the better performers among the media scrips. They are of the opinion that a fair valuation of the scrip is Rs 120-130.

Ashok Kumar, CEO, Lotus Strategic Consultants says, “I think the scrip got listed on a day when the markets were weak. But nevertheless, it is a good company. The fundamentals are strong and it is one of the better managed companies among all other Media companies. The immediate future of the scrip looks good.”

TV Today's listing comes at an opportune time, given the fact that is the year of the general elections and viewership of news channels usually peaks during this time. However, TV Today is operating in a highly competitive environment, with a number of news channels vying to capture eyeballs. Its competitors are DD News, Star News, Zee News, NDTV India and Sahara Samay. The Adhikari Brothers are also planning to launch a news channel soon.

For the four months ended July 2003, TVTNL registered sales of Rs 36.76 crore (up 37 per cent) and a net profit of Rs 8.20 crore (up 30 per cent). The annualised EPS for the period works out to Rs 4.3.

The key highlight of TVTN’s IPO was that the company garnered the response from only the domestic investors comprising Qualified Institutional Investors, high net worth individuals and the retail public. Keeping in mind the strong response from retail investors, TVTN had allocated 30 per cent of the offering to the retail investors’ category, 25 per cent to the non-institutional investors’ category and the balance 45 per cent to the qualified institutional investors’ category.

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