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Review By Dilip Davda on Sep 14, 2017

Madhya Pradesh Today Media Ltd. (MPTM) is a publishing house having a daily evening Hindi newspaper that was primarily launched in MP and is currently available in Chhattisgarh, UP, Delhi and Maharashtra. The group has also launched a Morning Daily soon thereafter in the year 2010. Now it also has plans to start publication and printing in other States of India in the years to come. The company has a strong team of experts having wide experience in print media. For ensuring the high standard and quality of the newspaper, a lot of care has been taken while team building. With its strong leadership and dedicated team of employees, the company expects to touch the new heights of success.

To part finance its expansion of business by upgrading unit offices in various cities in the State of MP and Chhattisgarh, working capital and general corpus fund needs, MPTM is coming out with a maiden IPO of 2146500 equity share of Rs. 10 each at a fixed price of Rs. 66 per share to mobilize Rs. 14.17 crore. Issue opens for subscription on 19.09.17 and will close on 21.09.17. Minimum application is to be made for 2000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue is solely lead managed by Mark Corporte Advisors Pvt. Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Having issued initial equity at par, it issued bonus shares in the ratio of 120 for 1 in July 2016 and 1 for 1 in July 2017. Post issue its current paid up equity capital of Rs. 2.42 crore will stand enhanced to Rs. 4.57 crore.

On performance front, for last four fiscals, MPTM has posted turnover/net profits of Rs. 15.68 cr. / Rs. 0.71 cr. (FY14), Rs. 15.37 cr. / Rs. 0.42 cr. (FY15), Rs. 15.20 cr. / Rs. 0.65 cr. (FY16) and Rs. 19.08 cr. / Rs. 2.33 cr. (FY17). Sudden spurt in top and bottom lines for FY17 is surprising. For last three fiscals it has posted an average EPS of Rs. 6.01 (on post bonus issue till July 2017 basis) and average RoNW is 40.60%. Issue is priced at a P/BV of 3.55. If we attribute latest working on fully diluted equity post issue, then asking price is at a P/E of 12.9 plus. As per prospectus details, its listed peers are trading at a P/E ranging from 9 to 18 (with an average P/E of around 15). Thus issue appears fully priced.

On merchant banker's front, this is the first mandate from its stable and has no past track record.

Conclusion: Considering fully priced issue, cash surplus investors may consider long term investment.

Conclusion / Investment Strategy

Review Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the past, SME IPOs drew the attention of investors across the board. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at own risk. The above information is based on information available as on date coupled with market perceptions. The Author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).

About Dilip Davda

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

Email: dilip_davda@rediffmail.com

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