This Radio market in 2015 was indicate coming-of-age industry however growth projection have not been reflected in operators books. Majority of income come from ads and sponsorship . ads is very seasonal market election time is good rest of time limited. Sponsorship is also very fragile market so in short this sector expected growth will be limited.
Also competition will come from other market mobile operators and mobile apps which now easily sync with your car system with data getting cheap will start using this in a big way so given this all factors i am not going give big future growth for radio operators
MY fair value for this IPO is around the issue price Rs335 give all this factor with 25% margin of safety
so IPO will list at 400 is a reasonable bet......
best option is sell the application in grey market
given election in some major state will see a very good final quarter for all media companies which will be good for the IPO
SO apply this IPO however if it was choice between Dmart IPO and Music IPO if cash is issue then go for Dmart
Initial Cash Flow: $52,00,00,000
Years: 1-5 6-10
Growth Rate: 20% 15%
Terminal Growth Rate: 5% Discount Rate: 10%
Shares Outstanding: 5,70,54,779 Margin of Safety: 25%
Debt Level:
Year Flows Growth Value
1 61,88,00,000 19% $56,25,45,455
2 73,01,84,000 18% $60,34,57,851
3 85,43,15,280 17% $64,18,59,715
4 99,10,05,725 16% $67,68,70,244
5 1,13,96,56,584 15% $70,76,37,074
6 1,31,06,05,071 15% $73,98,02,395
7 1,50,71,95,832 15% $77,34,29,777
8 1,71,82,03,248 14% $80,15,54,496
9 1,95,87,51,703 14% $83,07,01,932
10 2,23,29,76,941 14% $86,09,09,275
Terminal Year $2,34,46,25,788
PV of Year 1-10 Cash Flows: $7,19,87,68,214
Terminal Value: $18,07,90,94,778
Total PV of Cash Flows: $25,27,78,62,992
Number of Shares: 5,70,54,779
Intrinsic Value (IV): $443.05
Margin of Safety IV: $332.28
What Percentage of IV comes from 72%
the Terminal Value:
Zerodha (Trading & Demat Account)
RHP
IPO Guru (6600+ Posts, 21900+ Likes)
