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S Chand IPO Fully Subscribed: Five Things To Know Before You Invest

Founded in 1939, Delhi-based S.Chand & Company is one of the oldest and largest publishing company and educational content provider in India.
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S.Chand & Company has raised Rs 219 crore from anchor investors.
S.Chand & Company has raised Rs 219 crore from anchor investors.

Text book publisher and educational content provider S.Chand & Company's initial public offer (IPO), which was launched yesterday got fully subscribed as of 12 pm on Thursday. S.Chand & Company is the first publisher of educational books to come out with an IPO in more than 10 years after Navneet Education. The IPO priced in a band of Rs 660-670, S.Chand & Company aims to garner Rs 325 crore through fresh issue and the rest is an offer for sale by existing investors. The company on Tuesday raised Rs 219 crore at the upper end of the IPO price band from anchor investors. The IPO can be applied in lot sizes of 22 shares.

Here are five things to know:

1) S.Chand & Company promoters hold 58.3 per cent share in the company and post the IPO their shareholding will fall to 46.7 per cent. Out of the fresh issue of Rs 325 crore, S.Chand & Company plans to utilize Rs 240 crore for repaying loans.



2) Founded in 1939, Delhi-based S.Chand & Company is one of the oldest and largest publishing company and educational content provider in India. The company develops and delivers content, solutions, and services K-12, higher education, and early learning segments. As of December 31, 2016, it offered 55 consumer brands across knowledge products and services including S.Chand, Vikas, Madhuban, Saraswati, Destination Success and Ignitor among others.

3) The educational content (CBSE/ICSE) market size in India is around $500 million and S.Chand & Company is the leader in the segment with around 13 per cent market share followed by Oxford Publications and Orient Black Swan with nearly 6 per cent market share each, according to a report from Angel Broking.

4) S.Chand & Company has a robust financial track record. From FY2012-16, its revenue and net profit has grown at a CAGR of 33 per cent and 36 per cent respectively to Rs 538 crore and Rs 47 crore. For the nine months ending December 31, 2016, S.Chand reported a net loss of Rs 89 crore on revenues of Rs 150 crore. S.Chand & Company gets most of its revenues and profits in the last quarter of a financial year as its business is seasonal in nature.

5) At the upper end of the price band, S.Chand & Company's shares are valued at 3 times its FY17 estimated book value, which is lower compared to its peer Navneet Education (6.3 times its FY2017 estimated price to book value), says Angel broking. Angel broking has a "subscribe" rating on the issue. ICICI Direct, Hem Securities, Asit C. Mehta have also given "subscribe" recommendation to the issue, citing its future growth prospects.



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