March 2017 – OneMint

CPSE ETF FFO 2 Allotment Status & Listing

This post is written by Shiv Kukreja, who is a Certified Financial Planner and runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at skukreja@investitude.co.in

After receiving subscription to the tune of around Rs. 9,200 crore and successfully raising Rs. 2,500 crore out of it, Reliance Mutual Fund today made the allotment of units for its third tranche of CPSE ETF or Exchange Traded Fund. The further fund offer (FFO), which got opened for subscription on March 15 and closed on March 17, received a good response from the Anchor Investors as well as Non-Anchor Investors, including retail investors.

Units Allotted @ Rs. 26.8504 Per Unit – Retail applicants, who submitted applications for Rs. 2 lakh worth of CPSE ETF FFO 2 units, have been allotted 5,503 units @ Rs. 26.8504 per unit. That translates into an allotment worth Rs. 1,47,758 as against Rs. 2 lakh investment i.e. 73.88% allotment. Rest of the investment amount will be refunded by Reliance Mutual Fund to the investors directly in their respective bank accounts which are linked to their demat accounts.

Balance amount on account of fractional FFO 2 units would have been refunded to the investors’ bank accounts linked to their demat accounts.

Gain of 4.13% – As compared to today’s closing price of Rs. 27.96 on the NSE, allotment @ Rs. 26.8504 would translate to a gain of Rs. 4.13%, including the discount of 3.5% offered by the government to its investors. Its last tranche in January 2017 provided a return of 9.26%, including 5% discount, before listing on the stock exchanges. Though 4.13% return is not even 50% what investors could earn in tranche 2, it is still a decent listing gain in a short period of investment.

CPSE ETF Allotment Link – Here is the link to check the allotment status against your application submitted during the offer period – Allotment Status of CPSE ETF FFO 2. You can check the allotment status of your investment in this ETF by entering your application number or PAN number or DP ID – Client ID.

Contact Karvy Computershare on 1800 3454 001 for Allotment Issues or Queries – If you have not received any message or mail regarding its allotment and if it is not there in your demat account as well, you can contact the Registrar, Karvy Computershare on 1800 3454 001 or Reliance Mutual Fund on 1800 300 11111.

NSE & BSE Codes for CPSE ETF – You can easily track the current market price of this ETF by visiting any of these links of NSE or BSE:

NSE Link of CPSE ETF – Symbol – CPSEETF, ISIN – INF457M01133

BSE Link of CPSE ETF – Security ID – CPSEETF, Security Code – 538057, ISIN – INF457M01133

Listing on March 28 – Units of this CPSE ETF will be admitted for listing and trading on the stock exchanges effective today i.e. March 28. Here are the listing circulars of this ETF posted on the NSE and BSE:

NSE Listing Circular

BSE Listing Circular

If you have any more info about its allotment or any query regarding CPSE ETF or this FFO, please share it here. I’ll try to respond to it as soon as possible.

Health Hazards That Reduce Productivity of Employees

Today’s competitive environment constantly forces us to give our best. Businesses can easily disappear from the market for a simple reason of not being competitive enough. This volatility has created a highly demanding and complicated environment in many industries. Demand for highly productive workers is at its peak levels.

Is the productivity of your workers only dependent on their skills?

Name any workplace, and chances are it is teeming with health hazards (for the uninitiated hazard is any possible event abetting a loss) that can impact employees. This does not mean that organizations are not concerned with the health of their staff – it is just that it is the nature of the beast.

The Need of Workplace Safety

Any office will pose some health risk or the other to the people working within its environs. Some workplaces, however, are more of a hazard than others. And while it may not be immediately obvious, such health hazards often end up reducing the productivity of employees. In fact, there are times when the health risk is so acute that employees have no option but to opt out of the workplace.

Employers are legally bound to ensure that workplaces are safe and do not pose any dangers to the employees. Protection against health and safety hazards at work is the fundamental right of staffers. The productivity of the workers is also affected if they face repeated risks to their healthy lives at the workplace.

It is obvious that it is necessary to identify, monitor and reduce risks associated with the office premises to manage health and safety at the workplace, however another important aspect is to provide group health insurance to your employees. Before we throw more light on securing group health insurance, let us first identify what can constitute workplace hazards.

Various Health Hazards (Risks) in a Workplace

Any aspect of work that can cause health and safety risks and that has the potential to harm an employee constitutes a risk to the workplace. It is quite possible that some workplaces will pose more dangers to workers than others. Besides, some hazards are more likely to be present in some workplaces than others, depending on the nature of the business, as also the location of the workplace and the way the workplace is constructed.

Common hazards that may affect the productivity at any office/business

Physical Hazards

These are the most common workplace hazards, and examples are vibration, noise, faulty wiring, improper electrical connections, poor air-flow, poor cleanliness, lack of overall hygiene in the office, inadequate air conditioning, non-cleaning of ducts and AC filters, damp corners, ill-maintained washrooms, and so forth.

Ergonomic Hazards

These are physical factors that can harm the employees. Almost every workplace has ergonomic hazards, not matter how high-end the office is. It is impossible for a workplace to provide ergonomic seating to every employee, as people come in different shape and size, and it is simply not practical for employers to customize the chairs for all employees, even if they are really concerned with the health and well-being of their employees.

The fact is that the very act of sitting in front of a computer – something that has to be done by practically every individual in an office – poses dangers to the musculoskeletal system of employees. Carpal Tunnel Syndrome, Repetitive Stress Injury (RSI), Spondylitis, Sciatica, poor body posture, numbness, pinched nerves, and so forth, are just some of the problems that employees face on a daily basis. All of these can reduce their productivity significantly.

Chemical Hazards

Contact with dangerous chemical substances that employees might have to deal with as part of their job can also cause significant health problems. Even if there is no direct contact, the mere presence of toxic chemicals within the office environs constitutes a health hazard.

Biological Hazards

Bacteria and viruses within workplaces constitute biological dangers that can even prove fatal, or, at the very least, cause significant health problems.

Mental Hazards

These are the most pervasive hazards present in workplaces. Most jobs demand too much from employees, as do the employers themselves. The competitive nature of today’s workplaces means practically everyone is dealing with a lot of mental stress and fatigue.

Many employers deliberately set impossible targets for their employees in an attempt to eke out the most out of them and keep them on their toes all the time. While an element of competition is to be expected in a job, nowadays, every business faces so much competition, employers readily burden their staff with too much work. Expectations are sky-high, and promotions depend on endless hours spent toiling away.

In fact, some businesses, such as IT, finance, stock broking, etc., expect employees to work well after office hours, and even take the work home. Constant comparisons, the fear of losing out on a promotion, or the job itself, the constant threat of being reprimanded, sometimes in public, take a heavy toll on the health of employees.

Mental fatigue, burnout, depression, high levels of stress, a sense of reduced well-being, and so forth, are common ailments, leading to reduced productivity of employees.

Remedial Actions – Group Health Cover, Workmen Compensation Insurance

These health hazards not only affect the health of your permanent staff, but many a times if you employ some contractual workers at your business premise, they are also exposed to similar risks. While your permanent employees can be covered sufficiently with a group health cover, contractual employees also fall under your responsibility, and you can cover the risks to them with a workmen compensation insurance. It also benefits you in the long run if you regularly need to use such staff.

With so many hazards lurking in workplaces these days that threaten to reduce the productivity of workers, it is no wonder that a large number of companies are looking at providing group health insurance to their staff. Online corporate insurance advisors such as SecureNow can assist you in finding and managing the insurance policies to counter your workplace hazards and sustain the productivity and morale of your workers.

Reliance MF CPSE ETF Further Fund Offer (FFO) 2 – March 2017 Issue

This post is written by Shiv Kukreja, who is a Certified Financial Planner and runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at skukreja@investitude.co.in

CPSE ETF issued by Reliance Mutual Fund in January this year has already given around 10% returns to its investors and is currently trading at Rs. 27.70 a unit on the stock exchanges. The issue received subscriptions worth Rs. 13,726 crore and the government garnered its targeted amount of Rs. 6,000 crore. Buoyed by these high subscription numbers, the government has decided to launch the third tranche of CPSE ETF this year itself.

The issue is getting launched for the Anchor Investors from today, March 14. For the Non-Anchor Investors, including Retail Investors, Qualified Institutional Buyers (QIBs) and Non-Institutional Investors (NIIs), the issue will open from Wednesday, March 15. It will remain open for these four days to close on Friday, March 17. However, the issue size is much smaller at Rs. 2,500 crore, which I think would be insufficient to cater to the retail investors demand this time around.

Going by the time taken by Reliance AMC to list the units of its second tranche, I think this time it would take it even shorter time to do that. I expect the units to get allotted and listed on or before March 27.

CPSE Nifty Index – It is one of the indices of the National Stock Exchange (NSE) carrying 10 public sector undertakings (PSUs) in which the central government has more than 55% stake and these companies have more than Rs. 1,000 crore in market capitalisation. All these companies are profitable and are either Maharatnas or Navratnas.

CPSE Index Composition as on February 28, 2017 & February 28, 2014

CPSE Index Composition as on February 28, 2017 & Trade Data as on March 10, 2017

CPSE ETF or Central Public Sector Enterprises Exchange Traded Fund – This ETF got launched in March 2014 by Goldman Sachs Asset Management Company and listed in April 2014 on the stock exchanges. While the retail investors got its units allotted at Rs. 17.45, it quickly touched a high of Rs. 29.82 in less than 2 months in May 2014 when there was a euphoria after Mr. Modi took charge to serve this big nation as the PM. It is currently trading at Rs. 27.70 a unit and likely to touch its new highs very soon.

Features of CPSE ETF Further Fund Offer (FFO)

High Dividend Yield & Reasonable Valuations – All these listed CPSEs mentioned in the table above are profitable and pay relatively higher dividends on a regular basis. High dividend yield stocks have historically carried lower volatility in returns. So, you can expect a relatively stable performance from these stocks. Moreover, with years of underperformance, I think these CPSEs are set for a rerating going forward.

3.5% Discount for Investors – To attract more and more investors, the government is offering a discount of 3.5% on their investments. This 3.5% discount will be calculated on the “FFO 2 Reference Market Price” of the underlying shares of the Nifty CPSE Index and will be passed on to the CPSE ETF by the government of India.

Reference Market Price/NAV – As mentioned above, CPSE ETF is currently trading at Rs. 27.70 on the stock exchanges. This is also its reference market price or NAV. As the investors get allotment and FFO units get listed on the stock exchanges, market price of each unit of this ETF will be linked to the Nifty CPSE Index and its returns would be quite close to the returns generated by the CPSE Index.

Investment Objective – The scheme intends to generate returns that closely correspond to the total returns generated by the Nifty CPSE Index, by investing in the securities which are constituents of the Nifty CPSE Index in the same proportion as in the index. However, the performance of the scheme may differ from that of the Nifty CPSE Index due to tracking error, scheme expenses and the initial discount of 3.5%.

No Loyalty Units/Bonus in FFO 2 – Like its previous tranche, no loyalty/bonus units will be issued in this issue as well. With a reduced discount of 3.5% this time as against 5% in the previous issue, nobody could have expected of any such loyalty units.

Maximum Amount to be Raised – This ETF would target to raise Rs. 2,500 crore during this 4-day offer period. However, in case of oversubscription in the non-anchor investors category, partial allotment will be made to the investors.

Minimum/Maximum Investment Size – Individual investors can invest in the scheme with a minimum investment amount of Rs. 5,000 and there is no upper limit on the investment amount. However, retail investors investing upto Rs. 2 lakhs will be given preference in allotment in case there is an oversubscription.

Allotment & Listing – As per the offer document, units of this ETF will get allotted within 15 days from the closing date of the issue and listing on the NSE and BSE will happen within 5 days from the date of allotment. However, I expect the allotment and listing to happen a lot sooner than these indicative times.

Demat Account Mandatory – Investors need to have a demat account to apply for CPSE ETF. Applications without relevant demat account details are liable to get rejected.

Tax Saving u/s. 80CCG – Budget 2017 has proposed to end the benefits of Rajiv Gandhi Equity Savings Scheme (or RGESS) and tax exemption u/s. 80CCG from FY 2017-18. However, as this exemption is still available for the current financial year, this could be one of the last options we have to avail this tax exemption. CPSE ETF FFO 2 is in compliance with the provisions of Rajiv Gandhi Equity Savings Scheme and thus qualifies for a tax exemption of up to Rs. 25,000 under section 80CCG.

You need to fulfill two most important conditions to avail this tax exemption – one, your gross total income should not exceed Rs. 12 lakh in the current financial year and two, you must be a first time investor in equities. As maintained earlier as well, it is quite difficult to satisfy both these conditions simultaneously. Hence, only a few people would be able to qualify for it.

Lock-In Period with Tax Exemption – Investors, who seek tax exemption u/s. 80CCG, will be subject to a lock-in period of 3 years – 1 year of fixed lock-in and 2 years of flexible lock-in. The fixed lock-in period will start from the date of your investment in the current financial year and will end on March 31st next year i.e. 2018.

The flexible lock-in period will be of two years, beginning immediately after the end of the fixed lock-in period i.e. beginning April 1, 2018 till March 31, 2020.

No Tax Benefit Availed – No Lock-In Period – Investors who do not avail any tax benefit out of this ETF, would not be subject to any lock-in period. They can sell their units whenever they want.

Entry & Exit Load – This scheme is not subject to any entry load or any exit load.

Categories of Investors & Allocation Ratio

Anchor Investors – Maximum 30% of Rs. 2,500 Crore i.e. Rs. 750 Crore will be allocated to the anchor investors.

Retail Individual Investors – After the anchor book gets over on March 14, retail individual investors are allowed to take up all of the remaining portion of this FFO i.e. Rs. 1,750 crore.

Qualified Institutional Buyers (QIBs) & Non-Institutional Investors (NIIs) – QIBs and NIIs will have nothing reserved for them in this FFO. They will be allotted units only if the subscription numbers of the retail investors and/or anchor investors fall short of their reserved quotas.

Should you invest in Reliance CPSE ETF FFO 2?

This is what I had to say in January when the second tranche of this CPSE ETF got launched:

While many factors have turned in favour of these CPSEs and in a way the CPSE ETF investors and we also have a reasonably strong government at the centre with a clear majority, I think we are yet to have desirable results for our investments. I think there is still a lot of scope of making these companies truly competent and add a significant value to their stakeholders. I strongly feel that it is not the job of the government to run many of these businesses and hence most of these companies should be sold to the private players strategically.

This government has recently taken a decision to sell its 26% stake in BEML, after which the government’s stake will come down to 28%. I think it is a great move by the government and I strongly wish to see many such decisions get taken after the upcoming elections in five states. If this government succeeds in increasing the pace of reforms in the last two years, then I think it would not be difficult for these CPSEs to generate 50-100% returns for their investors in the next 2-3 years.

Election outcome in Uttar Pradesh and Uttarakhand is likely to work as a shot in the arm for the NDA government as well as for the stock markets. I think these are one of the best times for the Modi government to take desirable actions to take this country to the next levels. With a majority in Rajya Sabha going ahead, the government will have a free hand to carry out and implement some of the long awaited economic reforms, including the land acquisition bill, bankruptcy and insolvency code, real estate bill, labour law reforms and strategic divestment in PSUs.

As mentioned above, strategic divestment in some of the CPSEs would be one of the top priorities of the government going ahead. If carried out in an efficient manner, I think we can expect high returns from these companies and CPSE ETF in the next 2-3 years.

Even with a lower discount of 3.5%, it makes sense to invest in this ETF. But, not for listing gains this time around. I think with a gap up opening of stock markets on Tuesday, our markets would enter an uncharted territory and probably an overheated zone of valuations. With such a euphoria around, investors with a shorter investment horizon could face a volatility in returns. So, I would advise investors to invest in this ETF only with a medium to long term horizon in mind.

Application Form – CPSE ETF FFO

For any further info or to invest in the CPSE ETF Further Fund Offer (FFO), you can contact us on +91-9811797407 or mail me at skukreja@investitude.co.in

Avenue Supermarts (DMart) IPO Review – Subscribe or Not @ Rs. 294-299?

This post is written by Shiv Kukreja, who is a Certified Financial Planner and runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at skukreja@investitude.co.in

Avenue Supermarts Limited, which operates a chain of 118 supermarkets under the brand name ‘DMart’ primarily in the Western, Southern and Central India, is all set to enter the primary markets and has launched its initial public offer (IPO) from today i.e. March 8. The company wants to raise Rs. 1,870 crore from the issue in the price band of Rs. 294-299.

At the upper end of the price band i.e. Rs. 299 a share, the company will issue approximately 6.25 crore shares representing 10.02% of the post issue paid-up capital. Ace investor Radhakishan Damani and his family members presently own 91.36% stake in the company, but they are not selling any stake in this IPO. As always, the issue will remain open for three working days to close on March 10.

Before we take a decision to invest in this issue or not, let us first check out the salient features of this IPO:

Price Band – The company has fixed its price band to be between Rs. 294-299 per share and no discount will be offered to the retail investors.

Size & Objective of the Issue – Avenue Supermarts will issue around 6.25 crore shares in this issue at Rs. 299 a share to raise Rs. 1,870 crore from the investors. Out of this amount, the company plans to use Rs. 1,080 crore for repayment/prepayment of some of its loans and redemption/early redemption of its NCDs, Rs. 366.60 crore for the construction and purchase of fit outs for its new stores and the remaining proceeds for general corporate purposes.

Retail Allocation – 35% of the issue size is reserved for the retail individual investors (RIIs), 15% is reserved for the non-institutional investors and the remaining 50% shares will be allocated to the qualified institutional buyers (QIBs).

No Discount for Retail Investors – As mentioned above also, the company has decided not to offer any discount to the retail investors.

Anchor Investors – Avenue yesterday finalised allocation of approximately 1.88 crore shares to the anchor investors @ Rs. 299 per share for Rs. 561 crore. Some of these anchor investors include Smallcap World Fund, New World Fund, Government Pension Global Fund, General Atlantic Singapore Fund, FIL Investments Mauritius, First State Indian Subcontinent Fund, Fidelity International Discovery Fund, Franklin Templeton Investment Funds, Government of Singapore, Wasatch Emerging India Fund, Goldman Sachs India Fund, HSBC India Equity Mother Fund, JP Morgan India Smaller Companies Fund, Nomura India Stock Mother Fund, Acacia Banyan Partners and T Rowe Price New Asia Fund.

Bid Lot Size & Minimum Investment – Investors need to bid for a minimum of 50 shares and in multiples of 50 shares thereafter. So, a retail investor would be required to invest a minimum of Rs. 14,950 at the upper end of the price band and Rs. 14,700 at the lower end of the price band.

Maximum Investment – Individual investors investing up to Rs. 2 lakh are categorised as retail individual investors (RIIs). As a retail investor, you can apply for a maximum of 13 lots of 50 shares @ Rs. 299 i.e. a maximum investment of Rs. 1,94,350. At Rs. 294 a share also, you can apply for 13 lots only, thus making it Rs. 1,91,100.

Listing – The shares of the company will get listed on both the stock exchanges i.e. National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) within 6 working days after the issue gets closed on 8th March. March 21st is the tentative date for its listing.

Here are some other important dates after the issue gets closed:

Finalisation of Basis of Allotment – On or about March 16, 2017

Initiation of Refunds – On or about March 17, 2017

Credit of equity shares to investors’ demat accounts – On or about March 20, 2017

Commencement of Trading on the NSE/BSE – On or about March 21, 2017

Financials of Avenue Supermats Limited

Note: Figures are in Rs. Crore, except per share data, figures in billions & percentage figures

Peer Comparison – Avenue Supermarts, Future Retail & Trent (Westside)

Should you invest in Avenue Supermarts @ Rs. 299 a share?

What I like about this company is that it operates most of its stores predominantly on an ownership model. The company usually buys land for its stores, builds them and operates these stores rather than taking premises on rentals. This way the company is not required to pay rentals for most of its stores and thereby saves a huge amount it would have to shell out on paying rentals for its leased premises. Its biggest competitors, Future Retail and Reliance Retail, operate most of their stores from leased premises and thereby pay a hefty amount in rentals.

Moreover, the company procures its goods directly from the vendors and manufacturers, thereby eliminating the costs of middlemen. The company also focuses on minimising inventory build-up through product assortment.

At its expected issue price of Rs. 299, Avenue Supermarts will have an enterprise value of close to Rs. 19,300 crore. Based on its annualised EBITDA of around Rs. 1,060 crore, it will be valued at an EV/EBITDA of 18.21 times. Its listed peer Future Retail currently trades at an EV/EBITDA of 24.5 times, which makes this issue relatively more attractive.

At Rs. 299 a share, the company is valued at 32.5 times its expected FY 16 annualised earnings and 8.81 times its net worth. These valuations are not cheap. But, then the way the company has been growing and its profitability and margins have improved in a healthy manner over all these years, the issue doesn’t seem expensive from medium to long term perspective. As the sentiment is positive for the issue as well as for the stock markets, it looks extremely safe and attractive from listing gains point of view as well.

However, undue exuberance is the only thing I am worried about in this IPO. Investors are underinvested in the stock markets right now. A sharp recovery in the stock markets post demonetisation gloom has left all of us surprised. Most investors are still sitting on the sidelines waiting for the markets to correct. They are grossly disappointed with their less than potential investment in stocks. Cash balances are huge, but opportunities are limited for that cash to get deployed.

In this case, though the company is highly efficient and the issue is good, but then it is made out by the brokers and analysts that it would be a multibagger stock on the listing day itself. That is why I expect a huge oversubscription for this issue. That might result in some kind of euphoria as the stock gets listed on the stock exchanges. I would advise the investors to not feel euphoric about it and take this opportunity to book their profits on the listing day itself. However, everything else is fine with this issue and I would advise my clients and other investors to subscribe to it.

Music Broadcast Limited (MBL) IPO Review – Subscribe or Not @ Rs. 324-333?

This post is written by Shiv Kukreja, who is a Certified Financial Planner and runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at skukreja@investitude.co.in

Stock markets are trading at 52-week highs and very close to their lifetime highs. Investors are getting impatient and hunting for new opportunities to invest their money. To tap these favourable market conditions, Music Broadcast Limited (MBL), which runs FM radio stations Radio City and Radio Mantra across 37 Indian cities, has decided to raise Rs. 400 crore from investors and get itself listed on the stock exchanges. MBL is an 89.40% subsidiary of Jagran Prakashan Limited (JPL).

Its initial public offer (IPO), which opened yesterday i.e. March 6, is a combination of fresh issue of shares worth Rs. 400 crore and a simultaneous sale of 26.59 lakh shares by the members of its promoter group, thus making it a Rs. 489 crore issue. The issue will remain open for two more days to close on March 8 and the company is targeting March 17 to start trading on the exchanges.

Before we take a decision to invest in this issue or not, let us quickly check some of the main features of this IPO:

Price Band – MBL has fixed its price band to be between Rs. 324-333 per share and no discount has been offered to the retail investors.

Size & Objective of the Issue – As mentioned above, MBL is targeting to raise Rs. 400 crore from this IPO, while its existing shareholders are selling 26,58,518 shares. So, at Rs. 333 a share, it would turn out to be a Rs. 489 crore IPO. Out of Rs. 400 crore, MBL plans to use Rs. 200 crore for the payment of maturity proceeds against its listed NCDs, Rs. 82.74 crore towards early redemption of NCDs issued to JPL, Rs. 15.50 crore towards repayment of inter-corporate deposits (ICDs) of JPL and the remaining proceeds for general corporate purposes.

No Discount for Retail Investors – MBL has decided not to offer any discount to the retail investors.

Anchor Investors – MBL has already sold approximately 44.01 lakh to the anchor investors @ Rs. 333 a share. These investors have bought shares worth Rs. 146.56 crore. These anchor investors include HSBC India Equity Mother Fund, Nomura Funds Ireland – India Equity Fund, Franklin India Smaller Companies Fund, Morgan Stanley Mauritius, Pictet Country (Mauritius), HDFC Prudence Fund, ICICI Prudential Midcap Fund, HDFC Standard Life Insurance, SBI Life Insurance, Birla SL Insurance and India Midcap (Mauritius).

Bid Lot Size & Minimum Investment – Investors need to bid for a minimum of 45 shares and in multiples of 45 shares thereafter. So, a retail investor would be required to invest a minimum of Rs. 14,985 at the upper end of the price band and Rs. 14,580 at the lower end of the price band.

Maximum Investment – Individual investors investing up to Rs. 2 lakh are categorised as retail individual investors (RIIs). As a retail investor, you can apply for a maximum of 13 lots of 45 shares @ Rs. 333 i.e. a maximum investment of Rs. 1,94,805. At Rs. 324 per share as well, you can apply only for 13 lots of 45 shares, thus making it Rs. 1,89,540.

Here are some other important dates after the issue gets closed:

Finalisation of Basis of Allotment – On or about March 14, 2017

Initiation of Refunds – March 15, 2017

Credit of equity shares to investors’ demat accounts – On or about March 16, 2017

Commencement of Trading on the NSE/BSE – On or about March 17, 2017

Financial of Music Broadcast Limited

Note: Figures are in Rs. Crore, except per share data & percentage figures

Financials of ENIL – Entertainment Network (India) Limited

Note: Figures are in Rs. Crore, except per share data & percentage figures

Should you invest in MBL IPO @ Rs. 333 a share?

Comparing MBL’s financials with that of ENIL makes this IPO look reasonably valued at a P/E ratio of 25.23 times its annualised EPS for the current financial year as against ENIL’s expected EPS of Rs. 11.51 and 72.77 PE ratio. At Rs. 333 a share, MBL will have an enterprise value of close to Rs. 1,900 crore. Based on its annualised EBITDA of Rs. 91 crore, it will be valued at an EV/EBITDA of 21 times. ENIL currently has a market cap of Rs. 3,993 crore and based on its annualised EBITDA of Rs. 116 crore, it will be valued at 34.5 times EV/EBITDA. These valuations make MBL look attractively valued at Rs. 333 a share.

However, there are two factors to consider here. Firstly, ENIL’s financial performance has been notably bad in the current financial year. We all know such ups and downs are part of a company’s business fortunes. As there is no other listed company to make a comparison, I think ENIL’s bad financial performance should not be taken as a great comfort factor for MBL’s valuations. Secondly, Price to Book Value (P/BV) of MBL in double digits and its PE ratio of 25 times based on current year’s projected EPS of Rs. 13-14 also makes it not so attractive to me.

Moreover, Radio business is expected to get more and more competitive in the coming months and years. Entry of new players in an already competitive space might have an adverse impact on existing players’ financial performance going forward, including MBL.

Given an expected high subscription from the retail investors and slightly higher valuations, I would personally give it a miss for my investments and explore other better opportunities post the poll outcome in UP and other states on 11th March.