See DB Corp fair value at Rs 240-245/sh: Udayan Mukherjee

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See DB Corp fair value at Rs 240-245/sh: Udayan Mukherjee

DB Corp, publisher of Dainik Bhaskar, will list its equity shares on January 6, 2010. It has fixed the issue price at Rs 212 per share for its IPO of 1.81 crore shares. Udayan Mukherjee, Managing Editor of CNBC-TV18 said DB Corp would definitely see the value of Rs 235-240 on listing today.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » RELATED NEWS Dealers expect premium of around Rs 25/sh for DB Corp DB Corp BSE | NSE 01/06/12 Are Mutual Funds betting on DB Corp?

DB Corp , publisher of Dainik Bhaskar, will list its equity shares on January 6, 2010. It has fixed the issue price at Rs 212 per share for its IPO of 1.81 crore shares. Udayan Mukherjee, Managing Editor of CNBC-TV18 said DB Corp would definitely see the value of Rs 235-240 on listing today.

Here is a transcript of Udayan Mukherjee's comments on CNBC-TV18. Also watch the accompanying video.

The once, which I didn't think would do very well have not done too badly. We always thought it was a good one and that had left something on the table. So it should get to Rs 235-240 quite easily. I don't know about starters but eventually the fair value should be in that Rs 240 plus kind of zone because as we have spoken in the past the math is quite simple. Jagran Prakashan trades at 20 times next years earnings, 23 times current years' earnings. There is no reason why DB Corp should trade at a discount to that. If you add the same kind of numbers on current year EPS of Rs 10.50 next year EPS of Rs 12 odd, then you get to Rs 240-245 kind of levels.

DB Corp will get there. Now whether there is a stretch on the way up because the market is quite excited right now and the market loves liquid items like newly listed IPOs, you saw what happened with JSW Energy yesterday. It is possible that if people say, "If HT Media trades at 26-27 times then why cant DB Corp because that is growing as fast or faster?" Then in that kind of frame of mind DB Corp trades closer to the 25 kind of PE multiple, which takes it to Rs 300. So if the market remains hot, then DB Corp will settle somewhere between Rs 250-300. The fair value is probably Rs 240-250 but beyond that it's not a magic kind of story. It's an easily understood print media story.

So it will be a good listing, it will be a solid listing but it cannot be a fly away like a doubler over 2 months or something because then valuations will sort of flatten out at peer kind of levels.

Not much leverage:

People will take profits also. The best case scenario I think the likely scenario is Rs 240-250 to Rs 260 on the higher end and that is the trading range for the first couple of days but you don't know - with excitement you could get higher.

At least one thing is that the fundamentals are strong in this company. At best you would be paying a bit more, a couple of PE notches higher for that. But it's a large company, it growing fast. There is no problem with the story as such. It is not like 2013, 4 times book, that kind of number, that depending on what mood the market is in it will price-in at least this has some more fundamental bearings not a piece of land on, which the building will be built.