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Media content firm Shemaroo Entertainment had a dull stock market debut, with shares ending near its issue price on Wednesday.
The Mumbai-based firm’s stock closed at Rs 171 on the BSE on Wednesday, against the initial public offering (IPO) price of Rs 170 a share. During the day, the shares had touched a high of Rs 182 apiece but the momentum could not be sustained, with IPO investors cashing out.
At the closing price, the gains for institutional and high net worth investors were negligible. However, retail investors stood to gain, as they were offered 10 per cent discount to the issue price.
Shemaroo’s Rs 120-crore offering, which had closed on September 18, was subscribed seven times.
The debut was in contrast to two previous listings, of Sharda Cropchem and Snowman Logistics. These saw the share price gain more than 50 per cent on the first day of listing.
According to experts, Shemaroo had left little gains on the table for IPO applicants. Analysts say at estimated 2014-15 earnings, the company commands a price to earnings multiple of 18 times, more than its bigger listed peers such as Eros International.
Shemaroo has nearly 3,000 titles in its content library. The company, experts say, offers exciting growth opportunity but operates in a sector with intense competition from large production houses such as Yash Raj Films, UTV, Eros and Reliance ADAG.
