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S Chand and Company IPO: HEM Securities recommend to 'Subscribe' for long term -
S Chand and Company IPO: HEM Securities recommend to 'Subscribe' for long term
Hem Securities | Published: 25 Apr, 2017  | Source :

Co is a leading Indian education content company in terms of revenue from operations in Fiscal 2016. (Source: Nielsen Re-search Report). Co deliver content, solutions and services across the education lifecycle through its K-12, higher educa-tion and early learning segments. As of December 31, 2016, co offered 55 consumer brands across knowledge products and services including S. Chand, Vikas, Madhubun, Saraswati, Des-tination Success and Ignitor. Further, in December 2016, co acquired 74% of the outstanding share capital of Chhaya Pra-kashani Private Limited, and co now offer four Chhaya brands including Chhaya and IPP. Co have a contractual relationship with at least 1,958 authors (including co-authors) for over five years as on March 31, 2016. Additionally, Chhaya has contrac-tual relationships with at least 24 authors (including co-authors) for over five years as on March 31, 2016.

Co intends to deploy proceeds from fresh issue in repayment of loan availed by company and one of its Subsidiaries, EPHL, which were utilized towards funding the acquisition of Chhaya .Also co intends to utilize funds in repayment/prepayment, in full or in part, of certain loans availed of by company and cer-tain of its Subsidiaries, VPHPL and NSHPL

Reasons to "Subscribe"

Co has a strong presence in the CBSE/ICSE affiliated schools and increasing presence in the state board affiliated schools across India. As of December 31, 2016, co’s distribution and sales network (not including Chhaya) consisted of 4,932 dis-tributors and dealers, and co had an in-house sales team of 838 professionals working from 52 branches and marketing offices across India. Co’s Chhaya Acquisition has expanded its pres-ence in Eastern India to include an additional 771 distributors and dealers as of December 31, 2016, In Fiscal 2016, co sold 35.47 million copies of its titles and Chhaya sold 9.88 million copies of its titles. Co’s print facilities and distribution net-works are supported by its logistics network, which as on De-cember 31, 2016, comprised 42 warehouses located in 19 states to allow coverage across India. Additionally, Chhaya has two warehouses located in West Bengal and one located in Tripura



At higher end of price band of Rs 660-670, co is bringing the issue p/e multiple of around 31 .

However looking after fundamentals like high growth prospects , strong brand name & leading position of co , we recommend "Subscribe" on issue for long term.

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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor accept any liability whatsoever arising from the use of any of the above contents.