Music Broadcast, a Jagran group entity that operates the Radio City FM radio channel, soared 12 per cent over their initial public offering (IPO) price of Rs333 during the stock market debut on Friday.
The stock listed on the BSE about 26 per cent higher, at Rs420 but later gave up most of the gain to end at Rs373. The low it touched was Rs368. Around Rs850 crore worth of shares changed hands on the BSE and the National Stock Exchange.
The good listing day performance follows a stellar response to the Rs488-crore IPO last week; it saw a subscription of 39.7 times the shares on offer.
The company is a subsidiary of Jagran Prakashan, which holds around 70.6 per cent in it. The shares of Jagran closed 2.6 per cent lower on Friday, valuing the company at Rs5,903 crore.
At Friday’s closing price, Music Broadcast had a market capitalisation of Rs2,129 crore. It has raised Rs400 crore, which will be used to retire some of its debt. The IPO also comprised a secondary share sale worth Rs88 crore.
Music Broadcast is one of the oldest private FM broadcasters, with 37 radio stations under the 'Radio City' and 'Radio Mantra' brands.
Analysts had recommended that long-term investors subscribe to the IPO. They had pointed to the attractive relative valuation to its peer, Entertainment Network India (Enil), on the enterprise value (EV) to Ebitda (operating earnings) ratio and the price to earnings (P/E) basis.
Centrum Wealth Research had said: “At the IPO price of Rs333, the company was valued at 22.5 times the EV/Ebitda and 31 times the P/E on a H1 (first half of FY17) annualised basis. In comparison, its only listed peer, Enil, trades at an EV to Ebitda of 29.3 and a 62.4 P/E.”