Channel 9: Post Issue Analysis

After filing the DRHP, Channel 9 IPO opened on February 22, 2013 and it closed on March 26, 2013. The media company, which has quoted an issue price of Rs 25 per share, is valued at a much higher price than its peer listed companies. The issue is subscribed at 1.04 times constituting of 48.42 lakh equity shares in the issue, which has pumped in an amount of Rs 1210.5 lakh for the company.

Other than retail individual investors subscribed the highest, at 1.32 times. While market makers subscribed 1 times comprising of 2.40 lakh equity shares. However, the retail individual investors have not shown much interest, this particular segment subscribed just 0.70 times in this issue. Due to higher valuations of the company and a lack of experience in the media industry, most of the investors have not shown any interest in the public offering.

Moreover, after the listing of Channel 9 on the bourses on March 12, 2013, the scrip opened at a premium price. On its first day of listing, the scrip opened at Rs 26.25 and the last traded price is also the same with a volume of 12,000.

Though the entertainment and media industry is likely to grow at a good rate in the near future, Channel 9 has a very limited work area and a lack of experience in this industry. This makes the company a weak player.

Hence, in spite of the scrip being at a position which is 5% higher than the issue price, we are still pessimistic about the scrip.