Hindustan Media Ventures - Value Buy

We had carried the IPO analysis of Hindustan Media Ventures (HMVL) in our latest issue dated July 5, 2010. However, the company had not announced their price band then, but we still went ahead and analysed on the information available, and estimated the price band of Rs 200-220. We also said that we would update our analysis on our website www.dsij.in once the price band is announced. The issue is opening on 5th July, 2010 and will close on July 7, 2010 and the company has fixed the price band much close to our estimate at Rs 162-175.

Just a recap of what the company does. HMVL is promoted by HT Media and holds 98.85 per cent of stake in the company. The company is engaged in publication of the Hindi daily 'Hindustan' along with two magazines 'Kadambini' and 'Nandan' in the northern region of India. HMVL enjoys the number one position in states like Bihar and Jharkhand and also consolidating its position in Delhi, Uttarakhand and Uttar Pradesh. The Hindustan is the third largest daily newspaper in India with a readership of 9.9 million readers (Source: IRS Q1FY10). It has a strong presence in the states of Bihar and Jharkhand, with a strong growing presence in the Delhi-NCR region and the states of Uttar Pradesh and Uttarakhand.

Coming to the financials, the topline of the company stands at Rs 276.54 crore for 8 months ended November 2009 against Rs 352.69 crore for FY09 and a bottomline of Rs 43.8 crore vis-a-vis loss of Rs 3.9 crore for the same period. On the above-mentioned price bands on annualised earnings the company is likely to command a P/E of around 18.43-20.49x. The P/E seems to be much cheaper when compared to peers in the listed space. Therefore we suggest our readers to subscribe to the issue on a longer term basis.