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ENIL, HT Media up on auction: IDFC mixed on FM radio stocks

Chillicious Team

Shares of Entertainment Network (India) ( ENIL ) surged 10 percent intraday on Friday as it strengthened leadership position in the 1st batch of Phase-3 auctions. The FM radio company which owns popular brand Radio Mirchi spent  Rs 339 crore in auctions for 17 stations.

“The core Mirchi brand has expanded its footprint into 7 new towns – Chandigarh, Kochi, Kozhikode, Jammu, Srinagar, Guwahati and Shillong. In the bidding, the company focused on building a strong second frequency network in the biggest A+ and A category towns. ENIL has won a second frequency in Bangalore, Hyderabad, Ahmedabad, Pune, Kanpur, Lucknow, Jaipur, Nagpur and Surat,” it says in a statement to the BSE.

ENIL has also acquired a third frequency in Hyderabad, which makes ENIL the only company to have three frequencies in any city. Additionally, it has received permission from Ministry of Information & Broadcasting to acquire four stations from TV Today Network – Amritsar, Patiala, Shimla and Jodhpur – which will be re-branded as Mirchi shortly. ENIL had bought four radio stations of TV Today ‘s Oye FM at Rs 4 crore. The core Mirchi brand will now be available in 43 cities from 32.

IDFC maintains outperformer ratings on ENIL with a revised target price of Rs 792 per share. “If it gets approval for acquiring metro frequencies of TV Today’s radio operations, its total payout will be Rs 760 crore, which is marginally higher than our expectation of Rs 700 crore. However, we note that given the aggressive nature of the auctions, ENIL’s payout within bounds comes as a relief,” it says in a note.

Meanwhile, HT Media soared 11 percent after winning key stations in the auction. It spent Rs 340 crore in auctions for 10 frequencies and bought Delhi and Mumbai frequency for Rs 169 crore and Rs 122.8 crore respectively. Radio business contributes 4-5 percent to HT Media’s topline.

However, IDFC has an underperformer rating on HT Media. It believes HT Media has overpaid in Delhi and Mumbai to acquire the second frequency and there will be a long gestation period.

DB Corp and Jagran Prakashan (Radio City) pumped Rs 32 crore and Rs 62.5 Cr respectively for 11 frequencies each. Reliance Broadcast’s Big FM added 14 Frequencies for Rs 117 crore.

IDFC has an outperformer rating on DB Corp and neutral rating on Jagran Prakasha

At 12:01 hrs Entertainment Network India was at Rs 689.30, up Rs 27.30, or 4.12 percent,  HT Media was at Rs 85.70, up Rs 2.00, or 2.39 percent and DB Corp was at Rs 320.35, up Rs 4.35, or 1.38 percent on the BSE.

Posted by Nasrin Sultana
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