Likhitha Infrastructure debuts today; will it list at a premium?

Oil and gas pipeline infrastructure service provider Likhitha Infrastructure makes its market debut on October 15, with the final issue price fixed at Rs 120 per share.

Likhitha, which had the smallest initial public offering of Rs 61 crore, will be the 11th company to get listed this year.  Given the tepid response from institutional investors initially, analysts expect Likhitha Infra to see a muted listing.

"We are expecting flat listing, though the company's order book is healthy, which gives strong revenue visibility going forward and has a zero-debt status," Astha Jain, Senior Research Analyst at Hem Securities told Moneycontrol.

Following a poor response from qualified institutional buyers (QIBs) on the final day of bidding, the company extended the closing date to October 7 from October 1 and also revised the price band to Rs 116-120 per share from Rs 117-120 earlier. The issue opened for subscription on September 29.

Overall, the issue was subscribed 9.51 times as the portion set aside for QIBs witnessed a subscription of 22 times, HNIs 1.54 times and retail 23.71 times. But on October 1, QIBs portion had seen subscription just 45 percent, HNIs 5.39 times and retail 21.13 times.

Keshav Lahoti - Associate Equity Analyst, Angel Broking said, "This year most of the IPO had done stellar listing, we don't have any such expectation from Likhitha Infrastructure.”

The company’s market cap is just Rs 237 crore at the higher price and out of that, around 74 percent will be held by the promoter.

Likhitha Infrastructure has over two decades of experience in laying of pipeline networks along with the construction of associated facilities, as well as providing operations and maintenance services to leading city gas distribution companies in India.

It plans to use net issue proceeds for working capital requirements and general corporate purposes.

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