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Hem Securities IPO report on Likhitha Infrastructure
Company is an Oil & Gas pipeline infrastructure service provider in India, focused on laying pipeline networks along with construction of associated facilities; and providing Operations & Maintenance services to the City Gas Distribution (“CGD”) Companies in India. Company was founded by Promoter, Mr. Srinivasa Rao Gaddipati, in the year 1998 and has been engaged in the same line of business for over two decades. Over the years, company have diversified the gamut of services being provided by company from Cross-Country Pipeline Projects (CCP); City Gas Distribution (CGD) Projects to providing Operation & Maintenance (O&M) Services to CGD Companies. Company’s client base comprises of established players in the Oil and Gas Industry, both in public and private sector. Company have executed 10.75” OD x 69 Kms Petroleum Product Pipeline for the first ever Trans-National Cross-Country Pipeline of South-East Asia connecting India to Nepal, in the Year 2019, for supply of petroleum products.
Valuation and Outlook
Company is bringing the issue at p/e multiple of approx 12x at higher end of price band of Rs 117-120/share on post issue FY20 PAT basis. Company has established track record in executing Pipeline Infrastructure projects and O&M Services has 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. Therefore, looking after all, we recommend “Subscribe” the issue.
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