Hindustan Media IPO pricing appears competitive

Its bigger competitors Jagran Prakashan and DB Corp are trading at higher prices

Hindustan Media Ventures Ltd (HMVL), the publisher of Hindi daily ‘Hindustan’, is coming out with an initial public offer (IPO) on 5 July 2010. The company has fixed the price band at Rs162-Rs175 per share and plans to raise Rs270 crore through this IPO. Rating agency CRISIL has assigned ‘IPO Grade 4’ to the issue. The issue closes on 10 July 2010. HT Media Ltd will dilute up to 23% in its subsidiary HMVL post the IPO. HMVL’s businesses include Hindi daily ‘Hindustan’ and magazines ‘Nandan’ and ‘Kadambini’. It also has printing facilities and personnel transferred from HT Media on 1 December 2009.

Hindustan’ is the third-largest daily in India with a readership of 11,89,000 in the first quarter of 2010, according to the Indian Readership Survey (IRS). It has the largest readership in key Hindi-speaking markets of Bihar and Jharkhand, although these markets have lower purchasing power. The company expects that with 69% of the Indian population being rural, readership will increase further with increase in literacy levels.

HMVL’s price earning ratio (P/E) at the lower band of Rs162 stands at around 15.5 times its March 2011 expected EPS. Some of the listed newspaper businesses including its much bigger competitors Jagran Prakashan and DB Corp are trading at a slightly higher forward PE of 18-21.

HMVL’s five group companies—HT Digital Media Holdings Ltd, HT Burda Media Ltd, Firefly e-Ventures Ltd, HT Mobile Solutions Ltd and Metropolitan Media Company Private Ltd—have incurred a combined loss of Rs29.9 crore in FY2010.  With the IPO money, the company will purchase second-hand plant and machinery of Rs3.1 crore, will set up new publishing units costing Rs66 crore and will upgrade existing plant and machinery for Rs55 crore. HMVL’s advertising revenue was Rs104.2 crore in FY10 while its total income stood at Rs166.90 crore. It has a debt of Rs135 crore which was taken to take over the businesses from HT Media. The IPO money will be used to retire this debt. HMVL reported a net profit of Rs13.9 crore for the year ended March 2010.

There are 41 criminal proceedings pending against the company’s promoter HT Media and the employees and ex-employees, relating to defamation and obscenity charges under the Indian Penal Code and 109 outstanding litigations pertaining to income-tax, civil, and other categories. Edelweiss Capital Ltd and Kotak Mahindra Capital Company Ltd are the lead book running managers to the issue.


Mutual fund assets slump 16% in June; Reliance MF sees 15% decline

The total assets under management of the 39 fund houses in the country plunged by Rs1.27 lakh crore or 16% in June. The largest fund house, Reliance MF, witnessed a drop of 15% in its AUM to Rs1.01 lakh crore

The mutual fund (MF) industry saw a sharp decline in its total assets in June—with over 36% plunge for some companies—as investors’ withdrawals offset gains from an upward move in the equity market, reports PTI.

The total assets under management (AUM) of the 39 fund houses in the country plunged by Rs1.27 lakh crore or 16% in June. The total AUM of the industry stood at Rs6,75,858 crore, as per data available with industry body Association of Mutual Funds in India (AMFI).

The largest fund house Reliance MF witnessed a drop of 15% in its AUM, while JM Financial and Axis MF appeared biggest losers at over 36%.

At the end of June, the AUM of Reliance MF dropped by nearly Rs18,000 crore to Rs1.01 lakh crore.

The AUM of the second-largest fund house, HDFC MF, declined 15% or over Rs15,000 crore, to Rs86,648 crore. ICICI Prudential MF saw its average assets plunging by 16% to Rs73,800 crore.

"June has seen a sharp withdrawal by banks. Corporates withdrew from schemes to meet the advance tax payment deadline.

Also, the bidding for third-generation (3G) and broadband and wireless access (BWA) spectrum brought in some liquidity crunch in the system," L&T MF CEO Sanjay Sinha said.

There have been large-scale withdrawals from MFs in recent months, which perhaps is leading to the decline in AUM despite an upward move in the stock market. In June itself, the Sensex rose by 4.5%.

"Inflows into MFs could improve in the second half of July, by which time the tight liquidity condition is expected to ease," Mr Sinha added.

The average AUM of UTI MF declined by over Rs14,000 crore or 18% to Rs64,446 crore.

Only a few fund houses, including Mirae Asset MF and Peerless MF, witnessed an increase in their AUM during the month.

Those, who saw a decline in their AUMs also include Fortis MF (32%), Taurus MF (20%) and Canara Robeco (20%) and SBI MF (7%).

The government generated a revenue of over Rs1 lakh crore through the auction of 3G and BWA, against an estimated Rs35,000 crore, resulting in a liquidity crunch in the system.


Kerala to examine claims against Coke for pollution; soft drink major says move based on ‘pre-determined and unproven conclusion’

The State also plans to move against PepsiCo for alleged environmental violations—including polluting of groundwater and over-consumption of water—in one of its factories in Kerala

India finally seems to be becoming more aware of environmental issues being caused by major multinational corporations operating in India. This is a welcome change from the way the country bungled on the Bhopal gas tragedy, with polluter Union Carbide getting away without even so much as a slap on the wrist, for the world's worst industrial disaster.

The Kerala government plans to set up a tribunal that will hear and award compensation claims against Coke for causing pollution and water depletion. However, Hindustan Coca-Cola Beverages Pvt Ltd (HCCB) is questioning the State government's action and is calling it 'biased'.

"We disagree with the recommendations of the High Powered Committee (HPC) and the proposed follow-up action. The said Committee, in our view, was set up with the pre-determined and unproven conclusion that the operations of HCCB have caused (a) loss to the residents of Plachimada (in Kerala's Palakkad district)," said Kamlesh Sharma, senior manager-public affairs & communications, HCCB, in a statement.

The statement further adds that the government committee or panel reviewing claims must determine through "scientific study and through established process of law" whether any damage was caused to the residents of Plachimada, and who was responsible for such damages.

The State Cabinet's decision is based on the report and recommendations of the HPC which was released on 22 March 2010, holding HCCB responsible for causing pollution and water depletion in Plachimada. The committee was headed by K Jayakumar, additional chief secretary, Kerala government. 

The tribunal will consider claims of compensation from HCCB relating to water and air pollution, loss of agricultural crops and animals, diseases affecting human beings in the surrounding area due to the excess withdrawal and pollution of groundwater & surface water by the company, according to the report which has been accepted by the State government. The tribunal will also consider claims related to loss of wages and loss of educational opportunities.

As per the 'polluter pays principle', the HPC had suggested that HCCB be made liable for Rs216 crore (around $48 million) for damages caused by the company's bottling operations in Plachimada. According to officials from Kerala's water ministry, the tribunal will be set up within three to six months.
But Coke remains adamant. "This (action by the State) is in spite of the fact that numerous scientific studies by independent experts and investigations by the government of Kerala itself have shown that HCCB is not the cause of local watershed issues," Mr Sharma said in his statement.

Since March 2004, the HCCB bottling plant in Plachimada has remained shut due to the community-led campaign challenging HCCB's alleged abuse of water resources.

Local activists who have been involved in the campaign to shut down HCCB's bottling plant and hold the company accountable for the damage it has caused, welcomed the move by the State government. "Coca-Cola has been forced to shut down its operations in Plachimada since 2004, and no amount of legal manoeuvring will help it change the final outcome. The best thing Coca-Cola can do is to accept the will of the people and the State-pack up, pay up and leave," said Amit Srivastava of the India Resource Center, an international campaigning organisation.

Coke's biggest competitor, PepsiCo, is also facing the heat in Kerala. The State is planning to take on PepsiCo's alleged environmental offences. NK Premachandran, Kerala's minister for water resources, told the State Assembly on Thursday (1st July) that the PepsiCo factory at Kanjikode (also situated in Kerala's Palakkad district) has been consuming water beyond the permitted norms and chemical effluents and solid waste from the factory have been polluting the groundwater.



Shadi Katyal

7 years ago

What environment issue we talking. It is just another anti MNC and sp[ecially USA company as taking refuge under the name of Bhopal case.
\Why are we so self destructibve. The anti Coke has been there for years but no one could prove anything and now we hear this.
Does India wants jobs and investment or not?
When we talk of environmental new slogan why dont we look at our streets and garbage piles all over the towns. cows roaming and leaving enough dung for millions of flies to grow and does that not poulte the water ?
We first clean our own filth before blame anyone.
Yes if coca cola has poulated , the company must pay for all the cleaning.
we have to stop chasingt MNC and investment out of India.
Wonder why the writer didnot state the number of employees einvolved if plant is shut down?????

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