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Mid-Day makes dismal debut on BSE

Mid-Day Multimedia Ltd, the publishers of the country's largest-selling English-language tabloid, made a dismal debut on Monday on the Bombay Stock Exchange (BSE), as its shares first traded at Rs 45, 36 per cent below the initial offer price of Rs 70.

The shares closed at Rs 46.90, 33 per cent below the IPO price, after trading between a low of Rs 30 and a high of Rs 55.

The BSE 30-issue Sensitive index fell 1.06 per cent, and other media stocks declined by three to 10 per cent.

"It is just bad timing," said Jayesh Parekh, an analyst with SMIFS Securities, referring to Mid-day's listing at a time when the stock market is in a tailspin due to recent payment defaults and amid a slew of allegations of price manipulation and insider trading.

Market sentiment was further jolted by Friday's arrest of leading "Bombay bull" Ketan Parekh, a major investor in technology, communication and media (TMT) stocks. The arrest was made after markets closed on Friday.

Parekh is a director of Triumph International Finance India, the co-lead manager of Mid-Day's IPO in February. Parekh had helped media firms approach the capital markets with their IPOs and had invested in the sector as well.

MEDIA NOT FANCIED

When Mid-Day launched its IPO despite the poor interest in media stocks, managing director Tariq Ansari said: "I know the market is bad right now. But I believe we have a good story to tell."

Other media stocks such as Tips Industries, Mukta Arts and Balaji Telefilms which hit the market in the past year were already trading at hefty discounts to their offer prices as investor interest in the sector waned amid the global meltdown in the TMT sector.

Analysts said most of the recent media listings were content providers of small size, with brief corporate histories and not-so-robust business models, and would find it difficult to sustain investor interest.

Mid-day's dismal debut is bound to cast a pall over other media companies with serious plans to raise money through initial public offerings.

Content providers UTV Software and Nimbus Communications have filed offer documents with the Securities and Exchange Board of India (Sebi) to seek permission to go forward with IPOs, but are watching market conditions before deciding when to proceed.

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