Introduction:
Eros International Media Ltd is part of the Eros Group, which has global presense in Indian media and entertainment arena. The Eros Group operates on a vertically integrated studio model controlling content as well as distribution & exploitation across all formats globally, including cinema, digital, home entertainment and television syndication.
Established in 1977, Eros has over three decades of market leadership in creating a global platform for Indian cinema. The group has an enviable distribution network that spans across 50 countries and over 27 dubbed foreign languages, with offices in India, UK, USA, Dubai, Australia, Fiji, Isle of Man and Singapore. Eros has built a successful business model by combining the release of a portfolio of over 70 new films every year with the exploitation of a valuable film library of over 2000 film titles.
In 2006, Eros plc, the holding company of the Eros Group, became the first Indian media company to obtain a listing on the Alternative Investment Market (AIM) of the London Stock Exchange.
Objects of the Issue:
The objects of the Issue are:
1. Acquiring and co-producing Indian films, including primarily Hindi language films as well as certain Tamil and other regional language films.
2. General corporate purposes.
Issue Detail:
»» Issue Open: Sep 17, 2010 - Sep 21, 2010
»» Issue Type: 100% Book Built Issue IPO
»» Issue Size: Equity Shares of Rs. 10
»» Issue Size: Rs. 350.00 Crore
»» Face Value: Rs. 10 Per Equity Share
»» Issue Price: Rs. 158 - Rs. 175 Per Equity Share
»» Market Lot: 40 Shares
»» Minimum Order Quantity: 40 Shares
»» Listing At: BSE, NSE.
SP Tulsian
SP Tulsian says, the issue seems to be fairly priced. "Those looking to take an exposure in this sector, can go for it!"
India Infoline
EMIL sources all Indian film content for the Eros Group and exploits content across formats within India, Nepal and Bhutan. The Eros India library has rights of over 1,000 films, comprising of previously released films and music videos. The international distribution rights for such films (excluding Tamil Language films) are sold to overseas affiliates. It is also engaged in co–production/ production activity. EIML has registered a revenue and PAT CAGR of 58% and 45% over the past 4 years. We recommend investors to subscribe the issue.
Sharekhan
With an improved macro environment, higher disposable incomes, increasing number of multiplex screens (expected to double from the current level in next four years) and thrust on digitisation, the production and distribution companies would be able to monetise their contents better in the coming years. EMIL has a slate of big releases lined up for FY2011 and FY2012 in the Hindi genre.
On the other hand, with its strong content library and 51% stake in the Tamil film production and distribution business, the company is on a strong footing to reap the benefits of the growth in the Indian media and entertainment industry. At the lower and upper ends of the issue price, the stock is offered at 18.0x and 19.4x FY2010 earnings. We believe EMIL, with its strong distribution network and impressive content library, is a good long-term bet in the Indian media and entertainment space. However, investors should bear in mind the possible volatility in its financial performance on account of the fate of its movies at the box-office.
Nirmal Bang
Based on price of Rs 175 (upper end of the price band) and company’s FY 2010 earnings the company will trade at a P/E multiple of 19.44x which is lower than its peers. Also, company looks attractive in terms of P/BV and EV/Sales multiple given that company is expected to grow at a rapid pace as compared to its peers. The pipeline of movies to be released by Eros over the next two years will contribute to its top line growth as well as enrich its existing content library. The company is in a strong position to maintain a sustained financial performance by leveraging its business model as well as its extensive content library and looks attractive as compared to its peers. Therefore, we recommend SUBSCRIBE to this issue.
PINC Research
EIML is a strong play on the movie business. The company has more than 30 years experience in the fragmented Indian film industry, a ~ Rs89bn market according to FICCI-KPMG 2010 report. A 1000-movie strong library, extensive distribution network, a healthy movie pipeline, and good scale of operations underpin our confidence in the company. Over FY06-FY10, EIML's revenue grew at five-year CAGR of 83% and its market share increased from 2.7% to 6.5%. Aggressive amortization and better exploitation of film rights ensure high ROE (21% in FY10) on expanded net worth (and PBV of Rs63 in FY10). We recommend subscribe to the issue.
Hem Securities
The company is bringing the issue at price band of Rs 158-175 which will turn up into P/E multiple of 17-19 at post issue EPS on FY0 basis of Rs 9.06.
The company with its strategies like expanding further into regional language film markets, such as the Marathi, Punjabi, Telugu and Kannada markets, and increase the scale of its presence in these markets, exploring further digital distribution opportunities based on the experience of the Eros International Group in international markets including opportunities in mobile, DTH, digital cable and IPTV to further monetise value from the Eros India Library & consolidation of its music catalogues in order to exploit growth from radio, mobile, public performances and internet is well poised to cater the opportunities present in the sector. Hence we recommend investors to subscribe the issue.
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