Shemaroo Entertainment IPO-Should we invest?
(Updated: Shemaroo Entertainment IPO Allotment link added at bottom of this article). Shemaroo Entertainment Limited is coming up with an IPO next week. This company is an established integrated media content house in India with activities across content acquisition, value addition to content and content distribution. The IPO Price band is Rs 155 to Rs 170 (cut-off price is Rs 170. There are several good factors about this IPO. Does Shemaroo Entertainment IPO would create buzz like Snowman Logistics IPO and Sharda Cropchem IPO, which was oversubscribed almost 60 times? What should be your call on Shemaroo Entertainment IPO?
About Shemaroo Entertainment Limited
Shemaroo Entertainment Limited was founded in 1962, in Mumbai, as a book circulating library and today they are an established integrated media content house in India with activities across content acquisition, value addition to the content and content distribution. The brand “Shemaroo” is synonymous with quality entertainment together with film based copyrights and other entertainment rights. More details about the company can be seen in its prospectus.
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Issue details of Shemaroo Entertainment IPO
- IPO opens: 16-Sep-2014
- IPO closes: 18-Sep-2014
- Face Value: Rs 10 per share
- Price Band: Rs 155 to Rs 170 per share (cutoff price Rs 170). Retail invetors would get 10% discount on issue price. Hence you would get at Rs 153 (Rs 170 minus Rs 17). However when you are applying, you should indicate tick cut off price. Based on your retail status based on allotment only 153 would be deducted from your account.
- Minimum shares to be applied: 85 per lot
- Issue size: Rs 120 Crores
- Lead Managers: ICICI Securities Limited
- Listing: BSE / NSE
- Download Shemaroo Entertainment IPO Prospectus from SEBI website here
Purpose of the IPO: The funds would be used for the following purposes
- Fund working capital requirements
- Fund expenditure for general corporate purposes.
Company Financials
- The company generated revenue of Rs 103.64 Crores for the year ended Mar-10 and Rs 265.95 Crores for the year ended Mar-14. This indicates strong annualized growth of 27% in last 5 years.
- Company posted a profit of Rs 0.31 Crores for the year ended Mar-10 and a Profit of Rs 27.14 Crores for the year ended Mar-2014.
Reasons to invest Shemaroo Entertainment IPO
- Good revenue growth in last 5 years.
- Good profit of 10% on revenues for FY2014. It maintained 11% for FY2012 and FY 2013. Profits have been growing consistently.
- The Indian Media and Entertainment (M&E) industry grew from INR 728 billion in 2011 to INR 821 billion in 2012, registering an overall growth of 12.6 percent. The industry is projected to grow at a CAGR of 15 percent between 2012 and 2017 to reach INR 1661 billion. This would provide opportunities to companies like Shemaroo Entertainment.
Reasons not to invest in an Shemaroo Entertainment IPO
- There are criminal proceedings pending against this Company.
- Its Group Companies, its Directors, its Subsidiaries and Promoters are party to certain legal proceedings. Any adverse decision in such proceedings may adversely affect business prospects, results of operations and financial condition.
- Revenues and profitability are directly linked to the exploitation and growth of the company Content Library. Any failure to source content could adversely affect company profitability and business growth.
- The distribution of content may not generate adequate revenues to recover associated costs. This could impact company growth plans and may adversely impact our profitability.
- Intensified competition may result in content cost escalation which may restrict ability to access content at favourable terms or at all. Any escalation in the content acquisition cost as a result of such competition could result in us losing out on opportunities to acquire content, or, could impact the profitability of the content so acquired, which would adversely affect our growth and profitability.
- One cannot predict or forecast if a film created by them will be successful. In addition, changing consumer tastes further compromise company ability to predict which films will be popular with audiences in India and internationally.
- They have limited experience in producing films, which could adversely affect the quality and consequently the profitability of the films they produce.
- The company has availed of certain unsecured loans, which may be recalled at any time.
- Its Subsidiaries and Group Companies have incurred losses during recent Fiscal Years (Shemaroo Entertainment Inc, Shemaroo Entertainment Private Limited and Shemaroo Entertainment UK Private Limited).
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Recommendation / Investment strategy
- Based on consolidated EPS of FY2014 of Rs 13.74, the cutoff price of Rs 170, the PE Ratio would work out to be 12.37. Based on consolidated EPS of last 3 years of Rs 12.57, at the cutoff price of Rs 170, the PE Ratio would work out to be 13.52. Means for the issue price at the cutoff price of Rs 170, the PE Ratio asked is in between 12.3 to 13.5. Its industry average is at 24.7 and lowest is 4.8, hence asking price at a cutoff price of Rs 170 is reasonable.
- Shemaroo Entertainment IPO has several positive factors. Company revenues are growing consistently and has healthy profits at 10% of revenues. Issue price also looks reasonable.
- Retail investors would get 10% discount on issue price.
- After taking negative factors into consideration, investors can subscribe to this IPO. I am planning to subscribe to this IPO. Yes, I am a little disappointed that I have not been allotted Snowman Logistics IPO and hope to get some allotment for Shemaroo Entertainment Limited IPO.
How to check Shemaroo IPO Allotment?
Shemaroo IPO Allotment link is given below. You can click on this link and select Shemaroo and give necessary application no or PAN number and select ABSA/Non ABSA and it would indicate whether you got the allotment of not. Shemaroo IPO Allotment is expected to done by 28th September / 29th Septemer, 2014
http://mis.karvycomputershare.com/ipo/
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Suresh
Shemaroo Entertainment IPO
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I had allotted 1 lot of sheemaroo ent ltd but not able to sell d share is it ok hold the share or better to sell it out at loss also. Is there any possibility of increasing share price.
As indicated in my article, you can hold for 2-3 years
I applied for 2 lots got nothing.
Now after listing look like this share is not doing great closed on first day at only 171.
Is this share still good to buy or it is just that now market is not doing great due to RBI unchanged repo rate?
What is your take on this?
Wait to see its directoin and then enter.
No allotment to me either. I applied for three lots. Will try my luck on next IPO. Congratulations Suresh.
Sir,
I have appied 5 appication & got in 85 share in 1 appication. so . what can i do at listing day??? sell ya hold .
It has listed and trading at issue price only. Pls hold.
Dear Suresh
This time also, I have not been allotted Shemaroo. I applied for 3 lots.
rgds
Hi Suresh,
I’ve applied for all the 3 IPO’s but didn’t get even one 1 lot 🙁 . Is there any problem with the DP? I’ve mine with Geojit. Please let me know if I have to change my DP. Which is doing well?
If there are any stratgies please let us know.
Thank you
Kishore
Hi Kishore, I felt it is nothing to do with DP or time of allotment. It is done in consultation with stock exchange on methodology in case oversubscribed. Prescribed lots are choosen and randomly they are being allotted. Let me even try to do some more analysis and present as even I am getting lost in this transaction. Though I got some shares, but on listing it just lists at purchase price 🙁 Since I am not just looking only for listing gains, I would HOLD for 1-2 years or if I get 50% returns whichever is earlier.
Hi Mr.Suresh
I am also joining with unlucky group 0 shares so tell me view your on listing day advisable to buy ?
Good to buy, however it depends on listing price. If it is more than 30%-40%, you should wait
Are you suggesting to buy on listing date?
It depends. If it is getting listed only at say 30%, one can look to buy. But if it is getting listed above this, it would be risky if you want to hold for short term.
Almost everyone is trying to sell it. There are very less buyers. I haven’t bought it today. what is your take on upcoming days?
Multiple reasons Sri. 1) It is oversubscribed for 7 times only. Means, not a big investor follow-up stock 2) Market mood is not good. I would expect this to continue for some more time. But as a medium term investor, I would hold this for next 1-2 years minimum or 50% gain whichever happens earlier.
Hi Suresh,
Happy to know that you got allotment of 1 lot, Hope it also performs like other IPOs in recent past.
I didn’t get any allotment……keep posting about upcoming IPOs.
I have demat account in ICICI Direct, how come I can subscribe to IPOs that are not listed in ICICI direct?
Regards
Dharani
Hi Dharini, I got 1 lot, but no listing gains :-(. SME IPO’s are not being listed on ICICIdirect.com. These are being listed on small stock brokers. However not everything is listed with single broker, hence cannot indicate a single broker regd this.
If you have an SBI savings a/c with netbanking, you can try to apply for IPOs, you need to mention your demat a/c details while applying for IPO. In SBI some of the SME IPOs are available.
Badluck , Applied for 7 lot on first hours and didnt got any :@
should i purchase on listing, if yes then how much time i should hold according to u?
Try buying if it is getting listed within 30% premium, else, it would be risky if you want to hold for short term
Hi Suresh,
Allotment is out for Shemaroo. Still the bad luck continues….
Zero shares are allotted to me.
Hope you would have got some shares..
Regards
RK
Hi RK, Sorry to hear this. This time, I am lucky. I got 1 lot (85 shares) 🙂 Need to see whether this would create same wonders like Wonderla, Snowman and Sharda Cropchem
No luck once again !!!!
I applied for 3 lots allotted with none..
Should keep checking my luck in ipo…
Can I try to buy this share on listing day, which i couldnt in case of snowman, sharada with double mind ?
Would that be incurring gains/losses? Any suggestions on this?
Crazy, Hold your thought before we know the direction of this stock
This time 0 shares are allotted to me.
Congrats Suresh for getting 1 lot. Lucky this time.
Even myself got 1 lot this time, after hard luck in Snowman and Sharda (though I managed to get them from secondary market, much below their highs, though not any near to their IPO price).
Anyway, I had been following your posts since last odd 6 months or so, and I would like to take this opportunity to really appreciate and thank you for providing your insights and review of all the developments happening in financial world and that too free!!. I follow and read all your posts and acknowledge that your posts/ reviews, do help me (and others as well) in taking judicious financial decisions.
I would continue following your posts and believe that it would further help me taking great financial decisions.
Regards
Anil
Hi suresh,
When they are going to allot the share and date of listing? Are there any official information?
What is the expected listing price? Thanks for your time 🙂
Expected to be listed on 30-Sep or 1-Oct
Dear Mr. Suresh,
Thank you for your hard work in analysing every IPO. Me too subscribed for the Shemaroo IPO. (This is the first time)
Let’s wait and see. What is process then if I allotted shares? Is there any limitation (No. of days) to keep the shares or shall I sell immediately after listing?
You can sell on first day when gets listed.
hi suresh,
when will the allocation take place for this ipo?
thanks
Expected by next Monday/Tuesda
I subscribed
Snowman Logistics with 1 lot at cutoff price – Failed.
Sharada Corp Chem with 1 lot at avg price – Failed.
Shemaroo with 3 lots at cutoff – Waiting ……
I read some where that
Each numbered lot say (1x,2x,3x..) will be there.The no.of lots you subscribe for would take you into that bucket. Among that there would be sub-category of total quoted price. Say cutoff is Rs.100 and 1 lot = 80shares and you have subscribed for 3 times lot means 100*80*3 = Rs.24,000. The probability(chances of success) varies on the bucket you finally get into.
I am not sure if this is correct. Just posted my understanding.
Partly true. Companies would consult stock exchanges in finalising the allotment of no of shares in respective bucket. It is purely luck as in one bucket several thousands of investors would have invested and it is not possible to give it to every one when it is oversubscribed by 60 times.
Can you write on Momai Apparaels IPO
Hi Uma, it is being published tomorrow (Friday)
Hi Suresh,
Got to read about disinvestment through OFS for SAIL by government. Can you explain what is OFS, how is ot different from IPO and FPO? What is the process to take up the shares released by the government? Thanks in advance
Hi Uma, would do that in next few days
Just subscribed to this IPO…
Dear Suresh
I would suggest you to pl. advise the viewers on buying the long term Stocks, say 2 to 3 years period from now, on a weekly basis. I am sure this would incur you lots of research, time & energy. Also suggest, this is high time that you start a paid service. I have been waiting for this since last 1.6 years.
rgds
D RAGHAVAN
Respect Sir,I do Not have any demat account,can i still subscribe to this IPO,and what is the Rating Of this IPO by an independent agency like CRISIL etc.And Do You have any idea about grey market premium of this IPO?
Thanks & Regards
Shanu.
You can open demat account within few days.
suresh sir thanks for ur valuable guidance .
but i would clearly like to know that i should subscribe to the ipo of shemaroo entertainment or not ? ..
I am subscribing to this and advice investors too.
Sir, what is fastest wat to register for an IPO
I register an IPO through HDFC SEC tele broking and i think thats fastest way to register for ipo , NO checque , no form fillup.
Can u share any other fastest option to register an IPO
And 1 request is after ur research completes on ipo allotment pls post an individual article on this, how ipo allot member share and how can we increase chances to get alloted.
Thanx 🙂
Best way is login and click on apply. I felt this is fastest
Hi Suresh,
I am an Engineer working for MNC, I got to know about your website a week ago. Started to read article posted by you. Now I made a habit of seeing your website as soon as I log to internet. This would be my first IPO subscription.
Thank you Suresh once again…….for sharing valuable ideas to all
Regards
Dharani
Hi Suresh,
I have made it a habit to read your articles on investments once I found your website. Thanks for bringing up practical and yet well researched articles.
Dear Suresh,
What is the CRISIL/CARE rating for Shemaroo IPO ?
Crisil or Care have no rated
Hi Suresh,
Recently found your site through google and following since a month. I have read some of your past posts and you are doing a tremendous job.
Regarding this IPO, “Shemaroo is involved in 91 legal proceedings which are pending at different levels of adjudication before various courts and tribunals.”
Due to this factor I am skeptical to subscribe to this issue. Would like your view regarding this.
Most of the IPO’s which came recently, these issues have been seen. Hence these IPO’s are termed as high risk high return options.
Dear Suresh – Can you pl. reconfirm if retail investors should invest at a discounted rate of 10% of cut off price 170 i.e. 170 – 17 = 153. Whereas you have mentioned 158. Kindly clarify whether it is Rs.158 or Rs.153 presume probably this should be Rs.153/- and typo. Pl. correct me. rgds
Indicate cut-off price and based on your retail status, it would automatically give 10% discount during allotment.
Hi,
Sir as you said there would be 10% discount for retail investors and that comes out to be 170-17 = Rs.153 but you have quoted it Rs.158?
please also inform that this 10% discount would be available after the units are allotted or do we have to key in the discounted rate while purchasing?
Regards,
Tabish
see my response on comments
Hi Suresh,
Please modify the cut off price in the post. After 10% discount price will come to Rs 153/- but not to 158 😉
Thank you
Kishore
Done 🙂
Hi sir,
what is crisil rating for this ipo?
Given that snowman shares are not allotted is it a good strategy to buy them after it gets listed??
I feel yes
I was waiting for your review and recomendation on this one as well.
I did not get the shares for Wonderla and Snowman. Hopefully will get some for Sharda CropChem and Shemaroo
hi suresh,
u mentioned that there is a discount of 10% for retail investors i.e 170-17 = 153
so is the cutoff price 158 or 153?
Please confirm this.
thanks
I just corrected. Thanks for point
Hi Suresh,
I have a clarification now. Can you please let us know what should be the price we subscribe, the discounted price (158) or the Actual Price (170).
based on your status (retailer), it would automatically pickup 153 (not 158)
Hello Sir,
I am also unlucky so that’s why did not got shares of Snowman logistics.
I want to know what is basis of IPO shares allotment ?
Dear Mr. Suresh
We can bid at 170 or discount prices of 158
Rajkumar, when you apply, I think it would take 170, but based on your status and during allotment only 153 (not 158) would get deducted
hi suresh,
Need a small help, If I apply for one lot , should i give money in multiplication to 170 or 158. And if I apply with 170 multiplication, than how this 10% will be credited.
In same scope, is this retail discount was there in sharda Cropchem ,as I had applied into that also on cut off price of 156.
Thanks in advance.
it is 153 x 1 lot
hi suresh, Thanks for the reply. But you didnt Confirmed for tha Sharda Cropchem.
Was there any retail discount on that IPO also???
Thanks in Advance.
Saurabh Joshi
There was no retail discount for sharda cropchem
Thanks for the review. I am guided by you for the last three issues. No showering of “snow” .for me as well.
sir,dont post this comment
I jst want to inform that its min 85 shares lot for this ipo
nothing harm Nirav. Readers like you are helping me
Thanks for the review. For me also no shares alloted for Snowman Logistics. Hope we get some allotments on Sharda Cropchem IPO and this one.
Hi Suresh,
Thank you for posting again such a nice information. Me too missed Snowman Logistics, got my money back from them. I got a doubt here as you said it is coming for 10% discount for retail investors. Above you discount 10% from share value and said the cut off price as 158, But if this IPO is oversubscribed and they consider the 10% after allocating shares what will be the result?
Thank you
Kishore
Kishore, It goes normal. If it is over subscribed and when they allot shares as per what ever process they follow, the would allot shares at 158 for retail investors. First you should apply at cut off price