I discovered this company after reading an article in May 2022 (see link below). Signpost signed a definitive Memorandum of Understanding (MoU) to merge with the listed entity, Pressman Advertising Ltd. Since May 2022, several more companies have been listed on the bourse, indicating a clear upward trend in the advertising agency sector. According to my research, in the past two years, six new advertising companies have listed themselves on the bourses (BSE, NSE, and SME).
In 2023, Pressman Advertising (listed) received shareholder approval to merge with Signpost India (unlisted).
On February 14, 2024, Signpost India was listed on the BSE and NSE.
Overview of Pressman Advertising and Signpost India Ltd.
Pressman Advertising Ltd is engaged in advertising, Selling of Space for advertisement in print media and public relation business in India. The business is carried out through a network of offices located in Kolkata, Mumbai, Delhi and Bangalore.
The company’s business has four major segments – Advertising, Public Relations, Design and Digital.
Advertising – provides advertising across all media – print, electronic, outdoor, web and new media. The services include Corporate advertising, Brand Advertising, Financial Advertising, social advertising, government advertising, media planning and media buying.
Public Relations – offers comprehensive range of public relations that include Corporate communications, marketing communications, financial communications, media relations, investors & analyst relations, media training, event management, editorial services etc.
Design - helps its customers for designing in corporate brochure, logo design, newsletter, poster, billboard, product catalogues, direct mailer, marketing collateral etc.
Digital – Digital marking services include web design and development, search engine optimization, search engine marketing, email marketing and online media planning and buying services.
Signpost India Limited is engaged in the business of providing Out of Home (OOH) media services focused on programmatic digital OOH advertising. The media assets of the company include (a) Billboards: Conventional, Backlit, and Digital (b) Transit: Sky walks, Bus panel, Airports, Metro, Bus Queue Shelters, Smart Mobile Vans (c) Other innovative: Kiosks, Traffic Booths, public electric bicycle sharing. It operates pan India through 8 offices located at Mumbai, New Delhi, Chennai, Bengaluru, Kolkata, Nagpur, Pune and Nashik. The Company employs more than 400 manpower across Sales, Operations and other support functions.
The company’s business has five major segments – Digital Advertising, Transit Advertising, Mobility Advertising, Conventional Advertising and Content & Design.
Clientele: The Company has clients across multiple industries like Consumer Goods & Services, BFSI, Lifestyle, Real Estate & Construction, Media & Entertainment, Education, Pharma, Telecom, Automobiles, Hospitality and Government Ministries. The Company generates business through direct clients as well as through leading media agencies. Clients include Nestle, AirAsia, Samsung, Sony, Netflix, TVS, Viacom, Zepto, Skechers and Wework.
Business model: The Company secures the advertising rights for large projects including transit, digital, conventional only through competitive e-bidding from the government as well as local bodies & authorities for a tenure ranging between 5 to 20 years. After receiving the rights, commercialization of media assets may include construction & innovative aesthetics etc. The Company also enters long term leased contracts with private landowners for space for its billboards.
Signpost has secured significant projects in Mumbai, Bengaluru, and Pune, partnering with clients such as NPCI, Bihar Tourism, Skechers, Bajaj Auto, Netflix, Amazon, HUL, Lufthansa, Zepto, and other OTT & FMCG brands. It owns an impressive 24.31 million square feet of ad-space, along with diverse ad-tech solutions, across premier Indian markets, extending its reach beyond urban areas.
Pre-merger scenario
Pressman Advertising has been listed on the exchange for over 20 years.
Source: Screener.in
A positive aspect of the company is that it has not reported a net loss in the last decade, and its operating margin has consistently increased from 11% to 25%. The dividend payout percentage has also ranged from 29% to 52%. Sales were strong from 2013 to 2020 but experienced a sudden drop in 2021.
Source: screener.in
Post-Merger Scenario.
The Scheme envisages, inter alia, that the shareholders of Pressman Advertising Limited be allotted shares of Signpost India Limited in the ratio of one equity share of Signpost India Limited of face value of Rs 2 for every one share of Pressman Advertising Limited of face value of Rs 2 (Swap ratio 1:1).
After the merger, Signpost India was listed on BSE and NSE on Feb 14, 2024.
The company has performed exceptionally well over the last two quarters.
Shareholding pattern
Competitors Analysis
Recent developments
On Feb 12, 2024. Signpost extended its footprint into northeast India and West Bengal by securing exclusive advertising and promotional rights at Bagdogra Airport until 2029. It bagged 7-year ad contract of Bagdogra Airport. This contract was awarded following a competitive bidding process conducted by the Airport Authority of India.
On Mar 12, 2024. Signpost partnered with Switch, an electric vehicle making subsidiary of bus specialist Ashok Leyland for Exclusive Advertisement Rights on 200 AC Double Decker Electric Buses in Mumbai.
On Mar 19, 2024. Signpost purchased Commercial Property worth of Rs. 54 crores for their office space. Purchase of property from Pressman Realty Private Limited to Signpost India Limited was executed on 18th March 2024. Property details - Building comprising Basement, Ground plus 6 (Six) upper floors with Municipal Built up area admeasuring 1338.21 square meters, constructed on non-agricultural, freehold land admeasuring 710.50 sq. meters bearing City Survey No. 76A, of Village Brahmanwada. Vile Parle Division.
Industry Overview
The Indian advertising sector is projected to grow at a Compound Annual Growth Rate (CAGR) of 9.86% from Rs 93,166 crore in 2023 to Rs 1,12,453 crore by 2025, according to a report by Dentsu India.
It noted that digital media could register a CAGR of 23.49% to reach Rs 62,045 crore by 2025 from Rs 40,685 crore in 2023. Digital media is projected to comprise 55% of the overall ad spending by 2025 followed by TV and print with 25% and 16% share, respectively. By the end of 2024, digital media is anticipated to contribute 50% of the total advertising spending of Rs 1,01,591 crore followed by TV and print with 28% and 18% share respectively.
According to the report, the share of digital in the overall ad pie is projected to rise while that of TV and print are expected to decline. The report stated that digital media has surpassed television as the largest advertising medium by securing an ad spend share of Rs 40,685 crore in 2023, followed by television (Rs 29,836 crore) and print media (Rs 18,652 crore).
Within digital media, online video and social media are the biggest segments with advertising share of Rs 11,363 crore and Rs 11,962 crore, respectively. The share of paid search and display banners stood at Rs 9,419 crore and Rs 6,579 crore, respectively.
FMCG was the biggest advertising segment contributing Rs 31,428 crore to the overall ad spends followed by e-commerce (Rs 12,803 crore), and consumer durables (Rs 5,540 crore).
Source: Economic times
Industry growth drivers
- Rapid urbanization, rising technological acceptance, rising population, and favorable government laws.
- Digital Platform Penetration: Increasing internet access and the proliferation of digital platforms are aiding market growth.
- Dynamic Ad Content: Real-time updates to ad content based on changing variables are becoming a strategy to maintain audience attention and relevance.
- Programmatic Advertising: There is an increasing trend towards programmatic advertising, which automates the buying and selling of ad inventory in real-time1.
- Mobile Advertising: With the surge in smartphone usage, mobile advertising is becoming a significant channel for reaching consumers.
- Privacy and Consent: A rising focus on privacy and consent is shaping how agencies collect and use data.
- Interactive and Shoppable Ads: The growing popularity of interactive and shoppable ads is engaging consumers in new ways.
Key Highlights
- FY23 revenue was Rs. 341.96 crore, NPM was 10.3%, 9MFY24 revenue is 289.5 crore, NPM was 9%.
- Exclusive advertisement rights on 200 AC electric buses.
- Exclusive advertising and promotional rights at Bagdogra Airport until 2029.
- Post merger, promoters holding has increased from 43.09% to 75%.
- Ace Investor - Zaki Abbas Nasser holds 1.39% of the company.
- Increase in new listings in the advertising agencies sector.
- India comprises of around 40,275 advertising agencies, out of them, only a handful have opened up to seeking public funds.
- New listing in the last two years include DAPS advertising, Maagh Advertising, Bright Outdoor Media, Graphisads and R K Swamy.
- Upcoming IPO - LS Digital plans to file for an IPO.
Other sources
Disclosure: My views may be biased since I have invested in the company at a low price (Initial buy price Rs.68). I am also considering investments in its peers, such as Bright Outdoor Media, R K Swamy, and Daps Advertising.