S Chand and Company is planning to come up with an IPO which would open for subscription from Apr 26, 2017. We present to you below five essential facts about the company in point blank Q&A format
1. What does it do?
The company develops and delivers content, solutions, and services in the education K-12, higher education, and early learning segments. The publishing house prints books for primary as well as higher education like Engineering, Commerce etc. S. Chand publishers were the first in India to get ISO 9001:2000 certification
2. What will it do with money from IPO?
One of the key fact to note is about what the company intends to do from proceeds of IPO. It turns out that the company plans to repay term loans availed earlier by it and one of its subsidiaries, EPHL, which was utilised to fund Chhaya acquisition. A total of Rs 152 crore of the fresh issue will be utilised for this. Besides, Rs.88 crore with be spent on repayment or prepayment, in full or in part, of certain loans availed of by the company and two of its subsidiaries, VPHPL and NSHPL
3. Who are its promoters?
The promoters of the company are:
1. Mr. Dinesh Kumar Jhunjhnuwala
2. Ms. Neerja Jhunjhnuwala
3. Mr. Himanshu Gupta
4. How are its financials?
For the FY ending 2016, the company has reported a revenue of Rs.540 crores and a Profit After Tax of Rs.46.64 Crores. This has grown at a CAGR of around 33% when compared to FY 2012 figures where the revenue stood at Rs.174.64 crores and Profit After Tax at Rs.14.69 crores. However, As at Dec'16, the company had a total revenue of Rs.150.80 Crores and a loss of Rs.88.48 Crores!
5. Is the IPO price justified?
At upper price band of Rs 670 per share, S. Chand would trade at PE of 39.20 times its dilutive EPS of 17.09 for FY16 . Navneet Education is the closest listed peer of the company which trades at a humble PE of 25.5 times its trailing 12-month EPS. The difference is substantial by all counts
