Music Broadcast sets IPO price band at Rs 324-Rs 333

Music Broadcast, promoted by Jagran Prakashan and which operates radio stations under Radio City, proposes to open on Monday, March 6, 2017, an initial public offer (IPO) of equity shares of face value of Rs 10 each for cash at a premium consisting of a fresh issue of up to Rs 4,000 million and an offer for sale up to 2,658,518 equity shares by the selling shareholders. The IPO will close on Wednesday, March 8, 2017. The price band for the IPO is fixed from Rs 324 to Rs 333 per equity share. 

The equity shares offered through the Red Herring Prospectus (RHP) dated February 22, 2017 are proposed to be listed on BSE and NSE. 

Music Broadcast, in consultation with the book running lead manager, may consider participation by anchor investors in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended. The anchor investor bidding date shall be one working day prior to the offer opening date, that is, Friday, March 3, 2017. Bids can be made for a minimum of 45 equity shares and in multiples of 45 equity shares thereafter. 

The sole book running lead manager to the offer is ICICI Securities. 

Fifty per cent of the offer shall be allocated on a proportionate basis to qualified institutional buyers. Music Broadcast may, in consultation with ICICI Securities, allocate up to 60 per cent of the QIB Portion to anchor investors on a discretionary basis, out of which at least one-third will be available for allocation to mutual funds only, subject to valid bids being received from domestic mutual funds at or above the anchor investor allocation price. 

Further, not less than 15 per cent of the IPO shall be available for allocation on a proportionate basis to Non-Institutional Investors and not less than 35 per cent of the offer shall be available for allocation to retail individual investors in accordance with the SEBI ICDR Regulations, subject to valid bids being received from them at or above the offer price. 

Radio City has grown its presence from four cities in 2001 to 37 cities as on February 15, 2017. As on March 31, 2016, its radio stations reached out to over 49.60 million listeners in 23 cities covered by AZ Research (Source: AZ Research Report). 

In addition to presence in 37 cities, the company has a sales alliance with ITM Software & Entertainment, which operates ‘Suno Lemon 91.9 FM’ in Gwalior and Ananda Offset, which operates ‘Friends 91.9 FM’ in Kolkata. It also operates online web radio on its web portal, Planet Radiocity, which was launched in 2010. It operates 40 web radio stations in eight languages. 

For the six month period ended on September 30, 2016, Music Broadcast generated a total revenue of Rs 1,382.13 million, EBITDA of Rs 455.09 million and net profit after tax as restated for the period of Rs 297.56 million. For the fiscal year ended March 31, 2016, it generated a total revenue of Rs 2,455.06 million, EBITDA of Rs 785.87 million and net profit/ (loss) after tax as restated for the year of Rs 425.07 million. The company’s total revenue, EBITDA, net profit/(loss) after tax as restated for the year, grew at a CAGR of 20.45 per cent, 32.40 per cent and 54.09 per cent, respectively, between Fiscal 2013 and Fiscal 2016.