Girish Agarwal, Director of DB Corp fielded questions raised on his company’s IPO by the IPOguru.com team.

Some of the key excerpts and conclusions drawn from that tete-a-tete have been detailed hereunder :

DB Corp is one of the leading publishing companies in India and its high profile publications include the Hindi daily Dainik Bhaskar, Gujarati daily Divya Bhaskar and the Hindi business daily, Business Bhaskar.

The company also operates 17 FM radio stations (MyFM) through its subsidiary, Synergy Media Entertainment Limited (SMEL) and operates internet portals and short messaging service ("SMS") portals through its subsidiary I Media Corp Ltd. (IMCL).

The company now proposes to dilute 10 per cent of its stake to raise over Rs 3,850 million. Of this, 30 per cent comprises an offer for sale by the Warbug Pincus affiliate, Cliffrose Investment. The selling shareholder would however continue to hold 3.64 per cent stake in the company post issue.

When  theIPOguru.com  team enquired why the Warburg affiliate company was selling a substantial portion of its stake in the company, despite the kind of growth prospects that the investment bankers were suggesting, the management opined  that the question would be been best answered by the selling company. But he also conjectured that since Cliffrose Investment had applied for a stake in DB Corp in November 2005, it may well be the strategy of that company to partially book its profits.

When asked about the increasing competition and more specifically, the predatory marketing strategies undertaken by its competitors in Madhya Pradesh who have been distributing free editions of their Hindi newspapers to gain market share while undercutting the market leader, the management highlighted the fact that the company is still in a growth phase and has survived the onslaught such predatory strategies even in the past when its market share was lesser.

Further, as DB Corp is known to have a strong foothold in the national and select regional language newspaper segment, it plans to expand its reach and operations to newer geographies. It would also focus on consolidating its position in existing markets by upgrading present infrastructure facilities.

Resultantly, it has enhanced its strategic focused on increasing its reach into Tier II and III cities as the consumption growth expected in these cities is likely to outperform the relative growth in the highly crowded Tier I cities.

Regarding the company’s plans to enter into the English language publication segment, the focus remains on its agreements with DMCL for the grant of exclusive licenses to print, edit, publish, circulate and market the newspaper DNA in the states of  Gujarat and Rajasthan for 20 years.

The management also seemed confident about maintaining its growth rates and claimed that offer price of the issue is at a considerable discount to its listed peers.

Lastly, when asked about the nominal discount of Rs 2 per share for retail investors, Girish Agarwal proclaimed that the way they have won the trust of their readers, with the present IPO, they endeavor to win the trust and confidence of retail investors. The discount is thus a token for appreciation and a goodwill gesture from the company to highlight the fact that the company places a high weightage on its retail shareholders.

And so, if this IPO is really as generously priced as its management believes, wont it attract heavy subscription across investor segments.

Lets wait and watch, the IPO opens tomorrow.