The issue, which sailed through the previous day, received bids for 69,25,500 shares so far, which was 1.32 times the issue size of 51,00,000 shares.
The Hyderabad-headquartered oil and gas pipeline infrastructure service provider is selling shares in Rs 117-120 price band. At the higher price band, the issue is available at 12 times post issue FY20 EPS.
“The company has established a track record in executing pipeline infrastructure projects and O&M services. It has a long standing relationship with customers . The company has shown strong
financial performance with almost zero debt on its book. The company’s order book is healthy which gives strong revenue visibility going forward,” said Astha Jain of Hem Securities. She recommended a “Subscribe” on the issue
Investors can subscribe to the IPO by betting for a lot of 125 shares or in multiples thereof. One will have to shell out at least Rs 14,625 to bid for the issue.
The IPO consists of a fresh issue of up to 51,00,000 equity shares representing 25.86 per cent of the post-issue shareholding.
The company expects to raise a total amount of up to Rs 61.20 crore. Unistone Capital is the book running lead manager to the issue.
According to Choice Broking, at the higher price band of Rs 120 per share, Likhitha is demanding a P/E valuation of 11.9 times, while on FY23 earnings the demanded P/E multiple comes out to be 9.1 times.
“We feel the demanded valuation is stretched, secondly many strong established companies are available at lower valuations for the investors and lastly, being a labour oriented business operations, the company is highly susceptible to the labour laws. Thus, considering the above observations and the small issue size, we assign an “AVOID” rating for the issue,” it said.
The company’s share will be listed in “T” group with a 5 per cent circuit limit, thereby restricting the speculative bet in the share price movement, it noted.