Den Networks IPO opens; should you subscribe?

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"The present market capitalization of WWIL is at Rs 900 crore while that of Dish TV is at Rs 4,000 crore. At the current valuations, this company will have a market cap of Rs 2,700 crore, calculated on expanded equity base of Rs 132 crore. Considering this, issue is likely to have a good listing as also having potential to rise, if held with 6 to 12 months view. Hence, one can apply in the issue, even at the upper band", Tulsian added.

Manisha Bhatt said one should avoid the issue as it looked overpriced at issue price of Rs 195-205/share.

While asking about response to the issue, Bhatt said this issue should get oversubscribed comfortably considering that anchor have subscribed at the higher end of the price band of Rs 205 per share.

Issue details

The issue comprises a net issue to the public of up to 19,750,000 equity shares and a reservation of up to 250,000 equity shares for subscription by eligible employees. The issue would constitute up to 15.16% of the post-issue paid-up equity share capital of the company. The net issue would constitute 14.97% of the post-issue paid-up equity share capital of the Company.

Promoted by Mr Sameer Manchanda and Lucid Systems Private Limited, Den Networks is one of the largest national cable television companies in India engaged in the distribution of analog and digital cable television services (Source: MPA Report 2009). Since incorporation in July 2007, it has expanded analog cable services to 77 cities across India.

It currently provides cable television services in the National Capital Region of Delhi and the states of Uttar Pradesh, Rajasthan, Maharashtra, Gujarat, Karnataka, Haryana, Madhya Pradesh and Kerala. It has obtained an all-India ISP license and has recently commenced a limited roll out of broadband internet services in select areas, which it intends to expand in all the other cities where it operates.

The IPO Proceeds will partly fund the company's plans to invest in the development of cable television infrastructure and services; the development of cable broadband infrastructure and services; and acquisition of content and broadcasting rights amongst others.

The global coordinator and book running lead manager for the issue is Deutsche Equities India Private Limited. The co-book running lead manager for the issue is Antique Capital Markets Private Limited. Karvy Computershare Pvt Ltd is the registrar.

For the year ended March 31, 2009, it has reported loss of Rs 13.8 crore and total income of 271.11 crore.