S Chand and Company Ltd IPO Message Board (Page 51)

Next IPO IRB .

Apply or Avoid ?

Anand you have done excellent job with your DCF you have given good 16% growth which IMO very bullish given past growth was induce by inorganic growth which increased th top line and bottom line however it had adverse effect on RONW given liquidation of equity. Anyway great job also your topline and EBITDA is almost identical
in my analysis i have also kept bullish growth rate based on 16% growth and trapper to 13% for 10 years i get my Intrinsic Value Rs 676.76 and if i apply MOS of 15% to25% my fair price is 508 to 575 which is close to to old IPO price band of 570.

Greed management taking full use of bullish market sentiments and hiking IPO price band by 100

so based eagleye estimates my DCF model fair value is Rs540
                  

SChand IPO

Estimates:

FY 16-17
Sales 734Crs; EBITDA 189Crs

FY 17-18
Sales 879Crs; EBITDA 225Crs

FY 18-19
ales 1015Crs; EBITDA 276Crs

Thank anand once I reach home I will certainly read. As I said earlier you excel skill excellent and in my analysis even with bullish estimates I got fair value below IPO PRICEBAND around 570 to 600 that with MARGIN OF SAFETY

Eagleye even if I take the value and workout DCF ON THE ABOVE ASSUMPTION IPO PRICE SHOULD BE AROUND 520-550 range

S chand name is synonymous with educational books also the management has kept the company relevant over the years

why company reported loss in last 9 months for this year?

https://www.sptulsian.com/free-zone/ipo-analysis/S-Chand
S Chand

S Chand and Company is entering the primary market on Wednesday, 26th April 2017 to raise Rs. 325 crore via fresh issue of equity shares of Rs.5 each and an offer for sale (OFS) of upto 60.23 lakh equity shares by PE investor Everstone Capital and promoters, both in the price band of Rs.660 to Rs.670 per share. Representing 31.34% of the post issue paid-up share capital, total issue will raise Rs. 729 crore at the upper end, of which OFS portion is Rs.404 crore. Issue closes on Friday, 28th April and is likely to list on NSE and BSE on 9th May.

S Chand and Company, a 70 year old publishing house printing books and study material for K-12 and higher education segments, accounting for 73% and 24% of revenues respectively, has 2 printing facilities in UP and Uttarkhand which meet 85% of its printing requirement. Its distribution network comprise of 4,932 distributors, 838 sales professionals and 62 offices pan India. While company has forayed into digital learning, it is still a very small portion of business (<3% of revenue).

The likes of Wren and Martin (English Grammar) and Shukla Grewal (Accountancy) are among the ~2,000 authors with whom the company has contractual relations. However, revenue generation is highly concentrated among few, as top 20 authors accounted for 49% of FY16 consolidated sales of Rs. 541 crore. EBITDA of Rs. 128 crore was earned in FY16, leading to EBITDA margin of 23.7% while net profit came in at Rs. 47 crore, translating into net margin of 8.6% and EPS of Rs. 17, on equity of Rs. 14.92 crore, adjusted for 73:1 bonus and stock split from Rs 10 to Rs 5, effected in April 2016.

Since company publishes material mainly relevant for schools affiliated to CBSE and ICSE education boards, which begin new academic year in April, almost 75% of its sales are generated in Q4 i.e. Jan-March quarter. Hence, financial results for the first 9 months of the fiscal are quite frail. For 9MFY17, on consolidated revenue of Rs. 151 crore, even at the EBITDA level, company incurred loss, with negative EBITDA of Rs. 84 crore, as net loss swelled to Rs. 88 crore. Like-to-like data for 9M ended Dec 2015 is not presented in the RHP.

Company has made 3 acquisitions, aggregating Rs. 460 crore, since FY13. Most recent one being 74% buy in East India focused publishing house Chhaya Prakashini for Rs. 170 crore, in Dec 2016. Balance 26% stake in Chhaya will be acquired after 14 Nov 2018, for a consideration based on adjusted operational FY18 EBITDA. To understand dynamics of this acquisition, company has presented proforma FY16 consolidated financials (assuming Chayya acquisition undertaken on 1/4/15), based on which FY16 revenue and EBITDA stood at Rs. 668 crore and Rs. 176 crore respectively (EBITDA margin 26.4%) while net profit was reported at Rs. 67 crore (8.5% margin), leading to EPS of Rs. 19. In FY16, company sold 45.4 million copies (including Chhaya).

As of 31 Dec 16, company’s networth stood at Rs. 506 crore, leading to BVPS of Rs.170 per share. Promoter holding of 58.3% will shrink to 46.7%, post IPO, while PE investor Everstone Capital’s stake of 32.3% will contract to 13.9%. World Bank’s IFC holds 9.40% stake in the company since Nov 2015, and is not participating in the OFS. Fresh issue proceeds of Rs. 150 crore will be used to repay debt taken to fund Chhaya acquisition, while Rs. 105 crore debt of 2 subsidiary companies will also be re-paid. Company’s total consolidated debt of Rs. 418 crore, as of 31-12-16, will reduce to Rs. 163 crore post issue.

At Rs. 670, company’s market cap will be Rs. 2,325 crore and EV Rs. 2,458 crore. Based on estimated FY17 and FY18 EPS of about Rs. 21 and Rs. 26 respectively (including Chhaya), the PE multiples are 31x and 25x respectively. EV/EBITDA multiples are 14x and 12x for FY17 and FY18 respectively, which are quite rich.

Sole listed peer Navneet Education, with Rs. 1,100 crore topline, split 60:40 between publishing and stationery, is a cash-rich company with market cap of less than Rs. 3,900 crore. Navneet’s publishing business clocks much superior margins of 33%, at the EBIT level (23% blended for the entire company, including single-digit margins of stationery business) while S Chand, which is pure-play publishing, has only 19% EBIT margins. Thus S Chand is not reaping lucrative enough results from its specialized and sole business, despite both the companies having similar topline of about Rs. 600 crore from publishing sales. Moreover, Navneet is shielded from quarterly losses which S Chand suffers from – a big negative. Besides poorer margins, S Chand’s IPO valuation is superior to Navneet, with the latter trading at PE of 23x and EV/EBITDA of 13x, on FY17 estimates.

Taking a broader view, the business risk is not low in this case, as many schools have now embarked on developing their own content, as also CBSE board (accounting for a large portion of company’s topline) has recommended that all CBSE affiliated schools use only NCERT books upto class 8. Such risks and similar others in the future can impact business profoundly.

Another point to be highlighted is that companies from the education sector have rarely rewarded investors. Both MT Educare and Career Point drew a lot of investor fancy for their respective issues few years ago, but their fate is out in the open. Very recent issue of CL Educate in March this year also invoked lukewarm response, besides listing at 20% discount and still quoting 13% below IPO price. Thus, education sector has rarely had a good run on the bourses.

To conclude, on expensive valuations, investors can give this IPO a miss.

Disclosure: No Interest.

Education as a sector will continue to grow with company focused on the segment is well poised benefit. other good part is that it has geographical presence in all regions.

The huge untapped market opportunity in education content makes S Chand an edge due to its reach, content and management experience.

Big negative in my point of views are: There are Eight Directors are involved in the company namely- Savita Gupta, Himanshu Gupta, Desh Raj Dogra, Dinesh Kr Jhunjhunwala, Archana Kapoor, Sanjay Vijay Bhandarkar, Deep Mishra, Gaurav Kr Jhunjhunwala. But none of them are involved in any company which is currently listing in any exchange.
Second thing I checked through MCA website: lot of Assets under charges still registered in the company, this company has never been debt free in recent few years. Only EBITDA and EPS can not force me to go for the subscription. All in one a big NO from me for this scrip at this price.

IRB InvIT Fund''s is this IPO??

S Chand and Company in Brief:

Incorporated in 1970, S Chand and Company Limited is one of the Leading Book Publishing and education content company which delivers content, solutions and services across the education life cycle through K- 12, higher education and early learning segments. S Chand and Company is the leading K-12 education content company in terms of revenue from operations in Fiscal 2016, according to Nielsen, with a strong presence in the CBSE/ICSE affiliated schools and increasing presence in the state board affiliated schools across India. As of December 31, 2016, S Chand and Company offered 55 consumer brands across knowledge products and services including S. Chand, Vikas, Madhubun, Saraswati, Destination Success and Ignitor.

Navneet Publications in Brief:

Navneet Education Limited (NELI), founded by the Gala family, is in the business of (a) publishing – educational, supplementary, children’s and general books, (b) stationery products, and (c) digital education. It derives 54% of its revenue from publishing and 43% from stationery. NELI’s products are sold under the brand names Navneet, Vikas, Gala, Grafalco, Boss, Youva and eSense. It recently acquired Britannica India’s curriculum business which is synergistic to its CBSE curriculum business . Navneet also did buyback of shares to tune of INR 58crores in Jan 2017.

not sure abt your query. Naveent did the buy back NOT S CHAND

GOT IT WENT READ AGAIN IMO IT IS TYPO IT SHOULD BE NAVNEENT NOT S CHAND

Mr Ranga you are absolutely right that all the IPOs are not giving sweet fruits
You have given the list also
A great effort
But I am sharing a correction
Bajaj Corp share has been subdivided into 5 shares of Re 1
So the issue price comes to Rs 132
The share is traded at Rs 400
A good company
Good dividend
I am holding this share
Your efforts are highly appreciated

IRB InvIT Fund, which is sponsored by road developer IRB Infrastructure, will open its Rs 4,654.6 crore initial public offering for subscription on May 3, 2017. The price band for the issue is fixed at Rs 100-102 per unit.
The issue comprised of a fresh issue aggregating up to Rs 4,300 crore by the Trust and an offer for sale of up to 3,47,61,770 units by IRB Infrastructure Developers, Modern Road Makers Private Limited, Aryan Toll Road Private Limited, ATR Infrastructure Private Limited and Ideal Road Builders Private Limited, the company said in its media release.
The issue will close on May 5. The bid for anchor investors'' reserved portion will be opened for one working day prior to the issue opening date.
Minimum application size for bidders other than anchor investors and strategic investors bidding in the anchor investor portion is Rs 10 lakh, the company said.
Bid can be made for a minimum of 10,000 units and in multiples of 5,000 units thereafter.

IRB invit fund ipl opens on 3 may.
Price band-100-120
Size-4300 crore...

Price Band : 100 -102

IRB infra Fund
total issue 5035
fresh issue 4300
ofs 300
oversubscription extra max 400
total 5035 cr

Price band 100-102
return from units will 12% post tax

Minimum investment is rs 10lacs.

Tension in Korea neighborhood. Everyone keep an eye on this news. This should not happen and market may fall 2000 points if it happens. anybody any view, whether war will come or no is likely?

***war is likely??

buy 8500 put may series.

cochin shipyard & pratap snacks may come soon, got sebi approval

Hi,
From where do you come to know which issues have been approved by SEBI?

@ Septa - As NIDHIKE said U are not analysing this company in totality
70 year old conapny <--------------<


Now let me add my 2 Free cents to the theme ....
You won''t know S Chand''s worth if u can''t distinguish between the smile of "A Girl next door and that of "Mona Lisa" ....You would deride S Chand only if you are the kind of a guy who figured the Speyer and the everyday plonk were of same fragrance and quality.
I too had a few suspicions about everything ...but in the hindsight I realized that it''s not going to be too convenient to overlook the Antiquity .....Despite the CLEAR DOMINANT market position and the fact that No students could Pass or Fail Grade 12 without S Chand''s help, the margins seem paper thin and the story? It sort of lacks novelty.
So one must attribute the premium to the Antique Value I believe....the 70 long years of exhausting legacy that would passed onto their newly adopted children - ie- The Shareholders ..
So yes ..go for the Antique value ..Go for it ....

pata chala potfolio mein bhi antique he ho gaya with no value.

a typewriter is antique today so doesn''t mean you start buying typewriters instead of computers

what you are today is because of S CHAND & COMPANY

At Least one or two books you have read to pass out or get good marks ie 90%

in my school / college days in 1968 this company did not exist

I HOPE YOU WILL GET LISTING GAINS ,

All link time issues are doing well after listing ,

apply

LOLLLLL