Music Broadcast Ltd’s IPO Subscribed to 51% on First Day

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Radio City FM station management body Music Broadcast Ltd’s initial public offering (IPO) was subscribed to 51% on the first day of the offer.

At the first day, the portion reserved for retail investors was subscribed to 100%, while the high net-worth individual category was subscribed to 3%. The institutional investor category saw a zero subscription.

Recently, the company has raised Rs146.5 crore by allotting shares to its anchor investors as a part of the so-called anchor book allocation. Shares were allotted to anchor investors at Rs333 each, and the upper end of the IPO price band of Rs324-333 per share.

Investors who participated in the anchor book allocation comprise funds from financial institutions like Nomura, HSBC, Franklin Templeton, Reliance Capital, DSP BlackRock, ICICI Prudential, Birla Sun Life Insurance and HDFC Standard Life Insurance, among others.

Music Broadcast is planning to raise up to Rs400 crore as primary capital, while existing investors would be able to sell shares worth Rs86-88.5 crore through an offer for sale. Music Broadcast is also planning to use the proceeds of the share sale to cut debt and for the general corporate purposes. The company has hired ICICI Securities Ltd to manage the offering.

Radio City, which started its operations in four cities in 2001, is now present in 37 cities, including Mumbai, Bengaluru, Chennai, New Delhi, Pune and Hyderabad. As on 31 March 2016, it successfully reached more than 49.6 million listeners in 23 cities.

In the six month period from September 2016, Music Broadcast posted a revenue of Rs138.2 crore, earnings before interest, taxes, depreciation and amortization of Rs45.5 crore and an overall profit of Rs29 crore.