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Last Updated : Oct 01, 2020 07:55 PM IST | Source: Moneycontrol.com

Likhitha Infrastructure IPO subscribed 8.4 times on last day, retail portion 21 times

Brokerages recommended subscribing the issue given the expected expansion of oil & gas pipeline network and strong return on net worth (RoNW).

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The initial public offering of Likhitha Infrastructure has seen a good response especially from retail and high net worth individuals. The issue has been subscribed 8.4 times so far, on October 1, the last day of bidding.

The Rs 61.2-crore public issue has received bids for 4.3 crore equity shares against an offer size of 51 lakh equity shares, the data available on the exchanges showed.

Retail investors continued to provide strong support to the issue as their portion set aside has subscribed 21.13 times.


The reserved category of non-institutional investors witnessed 5.4 times subscription and that of qualified institutional buyers 45.3 percent.

The offer comprises a fresh issue of 51 lakh shares and after the issue, promoters' shareholding will be reduced to around 74 percent.

The price band for the issue, which closes today, has been fixed at Rs 117-120 per share.

Likhitha Infrastructure IPO: 10 key things you should know

Hyderabad-headquartered oil and gas pipeline infrastructure service provider is going to utilise issue proceeds for working capital requirements and general corporate purposes.

Brokerages recommended subscribing the issue given the expected expansion of oil & gas pipeline network and strong return on net worth (RoNW).

"At the price band of Rs 117-120, the Likhitha issue comes priced at a PE of 8.83x FY20EPS and P/BV of 2.51X based on its NAV Rs 47.8 per share in FY20. For the last three years, the company has posted an average EPS of Rs 11.7 and Return on Net worth of 35.1 percent. While Likhitha will be the first mover in the segment, there is no average industry P/E is available," KR Choksey.

The brokerage believes the recent government initiatives have provided profitable opportunities for work execution company like Likhitha.

India's pipeline network is expected to expand to around 35,000 km in the next 5-6 years, based on which the company is also planning to expand its pipeline laying execution capacity to a range of 250-300 km per year. The company has a strong project execution track record in the last 20 years, said the brokerage which recommended subscribe to the issue with a long-term perspective.

Hem Securities also recommended subscribing the issue as the company has established track record in executing pipeline infrastructure projects and O&M services have long-standing relationship with customers. "Also the company has shown strong financial performance with almost zero debt on its book. In addition to this company's order book is healthy which gives strong revenue visibility going forward."
First Published on Oct 1, 2020 12:33 pm