Sea TV Network IPO fully subscribed; should you invest?

Nifty BSE | NSE 31/05/12 Are Mutual Funds betting on Nifty?

The Rs 50.2 crore initial public offering of Agra-based Sea TV Network, a engaged in providing services of a Multi System Operator (MSO) to various Local Cable TV operators of Agra city, opened for subscription.

The issue, which closes on September 29, has been already subscribed 1.7 times, as per NSE website. The price band for the issue is Rs 90-100 a share.

Experts were mixed in their opinions. Manish Bhatt of Prabhudas Lilladher advised subscribing the issue for listing gains while investment advisor, SP Tulsian gives a thumbs-down to the issue, given the very limited geographic presence, huge competitive nature of the industry and steep pricing.

"The industry in which the company operates, also faces the challenge of technological obsolescence. Hence, it is required to undertake both operating and capital expenditure (running and fixed costs) at constant intervals. At the upper and lower end of the price band, the company is expecting a pre-money equity valuation of Rs. 63 crore and Rs. 70 crore respectively and a PE multiple of 41.9 and 46.5 times FY10 earnings respectively, which is very aggressive for its size and scale of operations," Tulsian said.

Also read: Skip Sea TV IPO; beware of small IPOs entering mkt: Udayan

Issue proceeds are proposed to be used for setting up complete Digital Headend and network for implementation of Conditional Access System (CAS); setting up network for complete IPTV solution; setting up of own cable distribution (underground optical fibre) network and setting up own 20 branch-offices in the city.    

Chartered Capital and Investment Limited is the book running lead manager to the issue and Link Intime India Pvt Ltd is the registrar to the issue. The equity shares are proposed to be listed on BSE.