DB Corp IPO opens; should you subscribe?

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DB Corp IPO opens; should you subscribe?

The initial public offering (IPO) of 18,175,000 equity shares of Publisher of Dainik Bhaskar, DB Corp has opened for subscription and price band is at Rs 185-212 per share. There were mixed opinions from experts and brokerages.

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The initial public offering (IPO) of 18,175,000 equity shares of Publisher of Dainik Bhaskar, DB Corp has opened for subscription with Rs 185-212 per share price band. The issue will close on December 15, 2009.

There were mixed opinions from experts and brokerages on the issue. Investment Advisor, SP Tulsian said it looked attractive at lower end of price band. But added that the IPO did not leave anything on the table for the prospective investors at Rs 212.

However, Deven Choksey of KR Choksey Securities said he would probably apply into this company and accumulate more if the market gave an opportunity on the downside.

Tulsian said, "The company needs to be compared with the listed peers, with similar size and reach, and on these parameters, HT Media and Deccan chronicle are the fit peers to compare. The company is bit weak on financials when compared with its peers but has certain advantages over those two, in respect to face value of share at Rs 10 of the company as against Rs 2 of those two and second being high promoters' stake at 86% against 64% of Deccan and 69% of HT Media."

He further added, "Considering the presence of the company with 7 newspapers, 48 newspaper editions, 128 sub- editions, as also, 31 facilities spread across 31 cities, with combined average daily readership of 1.55 crore readers, the company would get placed in the upper league of print media with other listed peers. Even the debt burden of the company is comparable with other two listed peers."

"Keeping all these facts in mind, issue at Rs 185, being its lower band, looks attractive while at Rs 212, being its upper band, does not leave anything on the table for the prospective investors, as better alternatives are available in the secondary market", he said.

Deven Choksey of KR Choksey Securities said, "If one is putting it on likewise basis with Jagran Prakashan then probably this company is having few of the unique position once again. Here we get atleast better ad revenue coming in that is the first solid point that we get. If we apply the kind of investment valuation or the price valuation of Jagran Prakashan then this stock is giving us an earning opportunity of atleast between 20-35% one year forward basis on the projected earnings. So I would probably go ahead and apply into this company and accumulate more if market gives an opportunity on the downside but otherwise this is a good company in the IPO space."