Update at 10.10 AM: S Chand and Company Ltd. (SCCL) made a rather modest debut on stock exchanges, listing at Rs 707, a premium of 5.5 percent to the issue price of Rs 670. It plunged to a low of Rs 658, before recovering to trade at Rs 676 later.
On the BSE, the counter changed 8.33 lakh shares with minutes of listing.
Update at 9.25 AM: The BSE Sensex and NSE Nifty were trading with gains in early trade. The 30-scrip Sensex was up 64 points at 29,990 while the NSE Nifty was trading 19 points higher at 9,333.
Top Sensex gainers were Axis Bank, Tata Steel and Asian Paints.
Original story:
S Chand and Company Ltd (SCCL), an Indian textbook publishing company, will make its debut on stock exchanges tomorrow (May 9) after a successful initial public offering (IPO) last month that was oversubscribed 59.49 times.
The company's public issue comprised offer for sale (OFS) of up to 6.02 million equity shares, including 3.2 million shares to anchor investors, and fresh issue of shares worth Rs 325 crore.
The OFS consisted of stake sale by Everstone Capital Partners, promoters and IFC. Post issue, the promoters' holding will come down to 46.7 percent.
The price band was fixed as Rs 660-670 per share of Rs 5 face value.
The company raised around Rs 219 crore by allotting 3.2 million shares to 15 anchor investors that included HDFC Trustee Company Ltd - HDFC Prudence Fund, Nomura Singapore Ltd, BNP Paribas Arbitrage, SBI Life Insurance Company and HSBC Global Investment Funds - Indian Equity.
During the IPO, the retail portion was oversubscribed 6.07 times while the Qualified Institutional Buyers (QIBs) segment was oversubscribed 44.27 times.
SCCL had said that it proposed to utilise the funds for pre-payment/repayment of loan worth around Rs255 crore and general corporate purposes.
For the financial year ended 2015-16, the company's net profit was Rs 47 crore on total sales of Rs 538 crore, while the estimated net profit and sales for 2016-17 were Rs 63 crore and Rs 675 crore, respectively, according to Angel Broking. In 2015-16, it sold 35.47 million copies of 11,144 titles.
The 2015-16 revenues came predominantly from K-12 segment. "K-12 is its largest business, contributing to 72.49 percent of its consolidated operating revenue in fiscal 2016," HDFC Securities said in a note.
K-12 is a term used to indicate an education system for students starting from kindergarten and going up to 12th standard.
As on March 31, 2016, SCCL had a contractual relationship with at least 1,958 authors.
SCCL has a share of about 13 percent of the education content industry in India, Angel Broking said in its IPO analysis note. "The company's closest peers Oxford Publication & Orient Black Swan have a market share of ~6% each. The company is also increasing its presence in State Board affiliated schools in order to further boost its revenue from the school segment," the brokerage said.
HDFC Securities said that the formal, informal and ancillary segments were collectively estimated at $90 billion as of 2015 and projected to reach $188 billion by 2020.
Formal segment comprises K-12 and higher education, of which K-12 is estimated at $49.5 billion comprising 1.1 million government schools and 0.4 million private schools, HDFC Securities said, citing a research.
The informal education segment, estimated at $19.6 billion, comprises test preparation, early education and vocational/skill-based training sub-segments.
