S Chand offering fairly priced, but business strategy bit risky: Analysts
The three-day initial public offering (IPO) of S Chand and Co will open for subscription on Wednesday, making it the first publisher of educational books to seek a stock-exchange listing in more than 10 years.
Priced between ₹660 and ₹670 apiece, the IPO comprises new shares worth ₹325 crore and an offer for sale of 6.02 million shares by existing shareholders. At the upper end, the IPO is expected to raise ₹728.55 crore.
Analysts said the issue was fairly priced and reasonable. In a report on April 24, Angel Broking said S Chand’s pre-issue works out to three times the FY2017 price-to-book value (P/BV) at the upper end of the price band, which is lower than its peers.
Navneet Education Ltd is trading at 6.3 times its FY2017 P/BV.
“Also, S Chand’s enterprise value to sales (EV/sales) multiple (at) 3.2 times is at a discount to Navneet’s 3.7 times. On EV/ EBITDA front too, S Chand’s issue appears to be attractive at 13.4 times against 16.3 times of Navneet” Angel Broking said.
EV/sales is a valuation measure that compares the enterprise value of a company to its sales. Ebitda stands for earnings before interest, tax, depreciation and amortisation.
Prabhudas Lilladher Pvt. Ltd says the issue values S Chand at ₹2,300 crore, implying an EV/ EBIDTA of 16.4 times of FY17. S Chand’s issue offers investors an opportunity to “play the publishing segment which has limited listed opportunities,” it added.
“The seasonality of S Chand’s business does not help in allaying fears as it earns more than 3/4th of its business in fourth quarter,” LKP Securities Ltd said in a report on April 21. Aadhaar gives a credible identity, compared to the quality of the various identity documents that are used traditionally. Because what we have seen in many studies where you take any identity document, immediately lot of fake, duplicate and bogus documents starts floating in the market. And then it creates its own complications. If the fake identity is used to get subsidies or service deliveries, it leads to leakage of that money, funds get diverted. UIDAI believes in collecting minimal information and (keeping) optimal ignorance. So UIDAI will only tell the agency that this Aadhaar number and this finger print is matching. For what purpose they use this, that information we don’t ask for. Therefore, UIDAI will never have any data that will impact your privacy. Your data will remain only with I-T