Thursday, September 9, 2010

Eros International IPO - Analysis, Recommendation, Subscription, Allotment, Listing

Analysis:
Eros International Media, a part of Eros group, is coming up with an IPO of upto Rs 350 crore. The company is a global player within the Indian media and entertainment sector and has been in the business for close to three decades. The Eros Group has an extensive film library and is in the business of sourcing Indian and other film content and exploiting it worldwide through its offices in India, UK, USA, UAE, Singapore, Australia, the Isle of Man and Fiji across formats such as theatres, home entertainment, television and digital new media. Eros plc, the holding company of the Eros Group, is a promoter of the company and is listed on the Alternative Investment Market of the London Stock Exchange.

Indian company, Eros Digital Private Limited holds 30.39% stake and foreign company, Eros Worldwide holds 69.60% stake in the company.

The issue opens on September 17 and closes on September 21. The company has fixed the price band at Rs 158 to Rs 175 per share.

The company intends to use up to Rs 280 crore from the net proceeds, to fund Hindi, Tamil and other regional language film projects that it intends to release in fiscal 2011 and 2012.

The book running lead managers to the issue are Enam Securities Pvt Ltd, Kotak Mahindra Capital Company Ltd, Morgan Stanley India Company Pvt Ltd and RBS Equities (India) Limited. Link Intime India Pvt Ltd is the registrar.

Recommendation:
The company has declared strong results for year ending 31st March. Basic Earnings per share up 4% to 36.5 cents (2009: 35.1 cents). Cash flow from operations up 59% to US$ 108.3 m (2009: US$ 68.2 m). Net debt reduced by 19% to US $104.3 m (2009:US$ 129.4 m). Revenues down by 4% to US$ 149.7 m (2009: US$ 156.7). Profit before tax up 2% to US$ 49.5 m (2009: US$ 48.4 m)
Debt is on a higher side and revenue saw a slight dip but still looks to be an attractive proposition. We would recommend this IPO to investors. CARE has given grade 4 rating to the IPO.

Subscription:
Eros International has got over 26 times subscribed after the slow initial response to the IPO. At the close of the IPO,
QII segment got subscribed 25.79 times
NII segment got subscribed 73.40 times
Retail segment got subscribed 11.95 times

Allotment:
Click here to check if you have been alloted Eros International shares!

Listing:
EROS International IPO got listed on 6th October, 2010.It closed the day at Rs 189, a premium of 8% over its issue price of Rs 175 a share after witnessing an intraday high of Rs 213.95 and low of Rs 177.65.


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