Bodhi Tree Multimedia SME IPO Fundamental Analysis (Avoid)

IPO Strengths

Established and strong reputation in Indian media industry.
Widespread geographical footprint covering multiple markets.

IPO Weaknesses

Inconsistent financial performance over the last 4 years.
Negative net worth.

IPO Size

Bodhi tree, established in the year 2013 is coming up with an IPO of 3, 90,000 equity shares of which 20,400 equity shares equity shares are reserved for the market maker. The net offer comprises of fresh issue of 3, 69,600 equity shares at a fixed price of RS 95amounting to around Rs 3 crore.

BRLM of the issue

Shreni shares Pvt. Ltd.

Registrar to the issue

Bigshare Services Pvt. Ltd.

Bodhi Tree IPO Price Band

Fixed price issue @ Rs 95 per share

Objects of the offer

Working capital requirements
General corporate purposes.

About Bodhi Tree

Engaged in the primary business activity of content production for television, films and digital platforms.Since inception, Bodhi Tree has produced a robust line-up of more than 30+ shows for major Broadcasters & OTT platforms. It has produced more than 1000+ hours of content on Television and OTT.
Registered office and studios is located in 507, Reliable Business Centre, Jogeshwari (West), Mumbai, Maharashtra. The company has studios obtained on rent basis whenever it is required. The client base includes some of the renowned names in Films, Television and OTT Industry.
Business model is B2B. Business activities operate in 3 verticals :
1. TV – Hindi GEC (General Entertainment channels): Produce contents for linear broadcast networks like Zee, Sony, Star, Disney, Viacom, Sun and others. These contents include daily soaps, reality shows etc.
2. Digital Platforms (OTT): Produce content for non-linear platforms such as Netflix, Voot etc.
3. Regional Shows: Produce content in regional languages including Tamil, Marathi, Bengali, and Gujarati on both TV and OTT platforms.
The main cost drivers in the business are the key talents (writers, directors, actors, technicians etc.) and rentals for locations, camera, lights, edit machines etc. hired for producing the content.

Bodhi Tree Multimedia SME IPO Financial Analysis

Bodhi Tree Multimedia SME IPO Financial Review/Financial Performance

The topline for Bodhi tree is showing a fluctuating trend since the last four fiscals as per the DRHP. The total revenue for FY 20 has reduced by 30% to Rs 26.71 crore from Rs 38.46 crore in FY19. In FY 20, Bodhi tree posted PAT of Rs 3.66 crore as against PAT of Rs 0.36 crore in FY 19. There were losses for the fiscals ‘18 and ‘17. Operating margin rose exorbitantly to 14.94% in FY20 from 1.53% in FY19 and net margin is 13.7% as against 0.94% in FY19. Bodhi tree has a negative RoNW.

Table 1 - Financials and Ratios (Amount in Rs Crore)
Title	FY2020	FY2019	FY2018	FY2017
Total Revenue	26.71	38.46	17.22	11.12
PAT	3.66	0.36	-3.34	-2.22
EBITDA	3.99	0.59	3.49	2.40
Total Accets	14.98	12.04	5.96	2.31
Operating Margin(%)	14.94%	1.53%	20.27%	21.58%
Net margin(%)	13.70%	0.94%	-19.40%	-19.96%
P/E	0.68	-	-	-
EPS	140.61	-	-	-
NAV	-23.43	-	-	-

Conclusion

The peers of Bodhi Tree include VR Films and Studios (P/E of 5.93), Balaji Telefilms (P/E 14.93) and Bag Films and Media (P/E 112.3); though they are not apple to apple comparison. Bodhi Tree has a diversified production portfolio and is widespread geographically but its strengths are offset by negative net worth and high volatility in its financial performance which puts a question mark over its sustainability of revenues. The NAV of the issuer is negative at 23.43 and IPO is valued at Rs 95 which hints at overvaluation. Thus, Investors should stay away from this IPO.

Reviewer recommends Avoid to the issue.

Review By CA Priyanka Choudhary on 29th Sep 2020

Review Author

About CA Priyanka Choudhary

CA Priyanka Choudhary, a freelance chartered accountant

Priyanka Choudhary Jain is a Chartered Accountant and an experienced credit analyst. She has worked with CRISIL as Senior Credit Analyst on ratings assignments including business and financial analysis in Corporates as well as the Public Finance Sector.

Email: [email protected]

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.