S Chand IPO opens: Subscribed 5% in 90 mins

NEW DELHI: The Rs 728 crore initial public offering ( IPO) of education content company S Chand & Company kicked off on Wednesday, with the issue receiving 5 per cent bids in the first 90 minutes of the bidding process.

The issue received bids for 368,610 shares by 11.30 am, compared with the total issue size of 7,685,284 shares. The portion reserved for retail investors was subscribed 9 per cent.

The company on Tuesday raised Rs 219 crore by allotting 32.62 lakh shares to anchor investors at the upper end of the IPO price band.

S Chand IPO: Five things you need to know before taking a call on it

Nomura Trust, HSBC Global Investment Fund, HDFC Company, SBI Life Insurance Company, Reliance MF, BNP Paribas Arbitrage, Birla MF, Kotak MF, Axis MF, HDFC Life and Sundaram MF were among the anchor investors who subscribed to the issue.

Angel Broking noted that the pre-issue valuations works out to 3 times of FY2017E P/BV (at the upper end of the issue price band), which is lower compared to its peers (Navneet is trading at 6.3 times its FY2017E P/BV).

“Also, the company’s EV/sales multiple 3.2 times is at a discount to Navneet’s 3. times. On the EV/Ebitda front too, the issue appears to be attractive at 13.4 times against 16.3 times of Navneet. However, the return on invested capital for S Chand and Navneet both are in the range of 28-30 per cent. Hence, considering the company’s leadership position in K-12 market, strong brand recall and pan India reach along with higher revenue/PAT growth, we believe that the company is rightly placed for further growth,” Angel Broking said.

Here’s what other brokerages said on the IPO