Risk of accidents or mishaps at any of the parks

Ensuring the safety of visitors on the rides is

critical for the smooth operation of an
amusement park. Even though the company has
stringent checks in place for safety and hygiene
standards, since majority of the company’s
current revenue is coming from operations of
amusement park and water park, any
accident/incident at any one of them may result
in the temporary closure of the park for some
time, thereby affecting revenues of the company
and generating adverse publicity.

Slowdown in economic growth in India may cause

business to suffer

The performance and growth of the business is

dependent on the health of the overall Indian
economy. As a result, any slowdown in the
Indian economy could adversely affect the
business, results of operations, financial
conditions as well as prospects.

Valuation
At the IPO price band of | 221-230, the stock is
available at 10.7x-10.4x in FY18E post issue
diluted EV/EBITDA. The EV/EBITDA of 10.0x is in
line with global peer average like Six Flags
Entertainment Corp and SeaWorld Entertainment
Inc. Adlabs’ strategic location near Mumbai and
Pune, good business potential & brand name and
an estimated hourly capacity of 15,000 (Imagica)
and 5,450 (Aquamagica) make a strong case for
long term play. Further, a large part of the
company’s capex is already done. The loan
repayment will help lower interest outgo while
surplus land of 170 acres and diverse revenue
streams offer enough incentives for a long term
investor to subscribe to the IPO. We recommend
SUBSCRIBE to this issue.

Exhibit 8: Peer valuation (FY14)

Revenue 5 yr
CAGR CAGR (%) EV/EBITDA EBITDA margin Debt/Equ
Imagica NA 422.4 6.5 3.
Wonderela 20.0 21.4 46.6 0.
Source: DRHP, ICICIdirect.com Research