Warburg Pincus has generated almost 2x returns from its investment in DB Corp. The media company that listed on the bourses on Wednesday opened at 18% premium to its issue price of Rs 212 and rose further to close at Rs 265.9, 25% higher than the issue price.
According to VCCircle estimates the cost of investment for Warburg Pincus is around Rs 125/share after taking into account changes in capital structure including bonus issue. The private equity major made a partial exit by selling a little less than half of its holding during the IPO.
It pocketed Rs 115.5 crore through the partial stake sale at the issue price of Rs 212. It continues to hold around 3.6% stake in DB Corp which at the last traded price for the day is valued at Rs 175.5 crore.
At the closing price today DB Corp is valued at Rs 4,823 crore or marginally over $1 billion dollar. This makes it the most valued print media company in the stock exchange overtaking Deccan Chronicle, Jagran Prakashan and HT Media. At this valuation it would also be the third most valued media firm behind Sun TV and Zee Entertainment.
But even at this level DB Corp is valued lower than what it aimed to in its previous attempt to float shares in late 2007 (just before the market crash). At that point it was looking at a market cap of around Rs 6,500 crore.
DB Corp owns seven newspapers having in total 48 editions. It publishes hindi newspaper Dainik Bhaskar that gives it strong regional footprint in the Hindi speaking states and advertising revenues. DB Corp also has 17 FM radio stations in nascent stage of operations. The company is primarily seen as a regional media play.