Impressive debut
Reliance Mutual Fund bought 4.2 lakh shares at Rs 1,207 per share on the NSE
The IPO of 68,89,000 equity shares was subscribed 46.92 times.
Only 10 per cent of its stake has been offered in the IPO.
Shares of Sun TV Ltd made their debut at Rs 1,111 on the Bombay Stock Exchange, 27 per cent premium to the issue price of Rs 875. The share price moved up to a high of Rs 1,500 and ended the trading session at Rs 1,466.05.
On the NSE, the shares were listed at Rs 1,000, moved up to a high of Rs 1,502.90 and closed at Rs 1,464.65.
Brokers and analysts tracking the sector said the stock price moved up on quick buying by institutional buyers.
Reliance Mutual Fund bought 4.2 lakh shares at a price of Rs 1,207 per share in a bulk deal on the NSE.
"Sun TV share price would settle at a realistic price in a couple of days. The IPO attracted a fairly good demand from institutional buyers. Those who got lesser allotment in the IPO were buying from the market today," said Mr Deepak Jasani, Head of Retail Research, HDFC Securities.
The IPO of 68,89,000 equity shares was subscribed 46.92 times. The retail portion was subscribed 2.9 times, that of non-institutional buyers 35.48 times and the portion for qualified institutional buyers, 70.8 times.
However, only 10 per cent of the company's stake has been offered in the IPO.
"As floating stock is very low, the share price moved up very sharply on buying support,'' said an analyst. "The share price at today's level looks quite stretched. Very few players barring FIIs would buy at these levels. The issue price of Rs 875 itself appeared big,'' said the analyst.
Attractive media
Nevertheless, Sun TV would be seen as an attractive media and entertainment stock for investors, analysts said. It has a profile close to the media and entertainment heavyweight Zee Telefilms Ltd, though the latter is considerably bigger and has a national presence.
Sun TV is part of the Sun Network, which runs 14 TV channels, four FM radio stations, two daily newspapers and four magazines.
The issue proceeds would be used to beef up Sun TV's subsidiaries, launch more TV channels, construct its own corporate office, set up studio facilities and up-linking infrastructure, purchase new equipment and upgrade existing ones.
"Sun TV's listing at a huge premium would definitely have a rub-off effect on other media stocks such as ZTL and NDTV. Media is one of the many sectors that appear buoyant at this juncture,'' said Mr Rahul Rege, Senior Vice-President, Sharekhan.
According to him, the fast moving consumer goods sector's upbeat performance would help the media industry, as there is a link between the two.
In Monday's trade, ZTL shares moved up by Rs 4.95 to Rs 247.05 on the BSE. NDTV moved up Rs 8.30 to Rs 270.35. TV Today rose by Rs 5.35 to Rs 105.50.