Music Broadcast Ltd (MBL) – the company behind popular Radio City FM stations – is gearing up to launch its IPO. MBL’s board of directors approved the IPO plans in a meeting yesterday, said its parent Jagran Prakashan in a stock market update. MBL will be looking to raise up to INR400 crore by issuing new shares while existing shareholders will also sell their shares in the upcoming IPO.
“The IPO would comprise of fresh issue aggregating upto INR4,000 million (INR400 crore) and offer for sale by existing shareholders,” said the company in the filing. The company did not specify timing of the upcoming MBL IPO.
Following MBL’s acquisition by Jagran Prakashan in June 2015, it has become a fully owned subsidiary of the latter. Jagran Prakashan is a leading publisher whose portfolio includes Hindi daily Dainik Jagran, English afternoon daily Midday and education portal JagranJosh.com. The parent company’s portfolio also includes Naidunia, I-Next, City Plus, Punjabi Jagran, Josh Plus & Sakhi.
Radio City – a strong performer
According to a presentation by Jagran Prakashan, the radio business registered operating profit margin of 34% in the year ended 31 March 2016. During the FY, the business earned profit before tax of INR42.36 crore and operating profit of INR77 crore while its revenues stood at 227 crore.
The business owns and operates 39 FM radio stations in Ahmedabad, Ahmednagar, Akola, Bengaluru, Chennai, Coimbatore, Delhi, Hyderabad, Jaipur, Jalgaon, Lucknow, Mumbai, Nagpur, Nanded, Pune, Sangli, Solapur, Surat, Vadodara, and Visakhapatnam. This also includes the stations acquired in the latest auctions. MBL claims to have over 45 million listeners.
The FM Radio space already has a listed company in the form of Entertainment Network India Limited (ENIL) which operates Radio Mirchi. ENIL has a market capitalization of nearly INR3280 crore and trades at a price earnings (PE) ratio of 42. Radio City is a strong brand and ranks in the top two players in most markets. As a result, MBL IPO will be an interesting offer to keep an eye on.