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L&T Infotech’s upcoming IPO has been priced in the range of INR705 – 710 per share. Retail investors will be offered a discount of INR10 per share. At the upper end of the price band, L&T Infotech IPO will mobilize INR12.4 billion (INR124 crore) by selling 17.5 million shares. All the shares will be sold by its corporate promoter Larsen & Toubro (L&T) through an offer for sale (OFS). As a result, L&T Infotech will not receive any proceeds from the IPO. According to the red herring prospectus (RHP) filed by the Mumbai based IT services and solutions company, the IPO will put a valuation of INR 120.6 billion on its operations.
The objects of the offer are to achieve benefits of listing equity shares on the Stock Exchanges and to carry out the sale of up to 17,500,000 equity shares by the selling shareholder. The listing of the equity shares will enhance our brand name and provide liquidity to the existing shareholders
– L&T Infotech’s Red Herring Prospectus
L&T Infotech IPO has been a matter of extreme speculation as the company made heavy changes to the terms of its earlier offer. As a result, the company was required to seek the regulatory clearances once again. Most important among the changes was the reduction in offer size at lower valuations as the number of shares to be sold remained same in both instances. The company was reportedly looking to raise around INR20 billion originally by selling 17.5 million shares at a price earnings (PE) ratio of nearly 24.
Stellar financial performance
L&T Infotech has been registering higher sales revenues and profits in recent years. In the prospectus filed with SEBI, the company said its profits more than doubled in the last five years while the top line growth was slightly less. In the financial year ended 31 March 2016, the company earned a profit from continuing operations after tax of INR9.2 billion on revenues of INR61.4 billion.
L&T Infotech’s consolidated financial performance (in INR crore)
|Profit from continuing operations after tax||419.3||510.0||659.8||760.0||922.3|
As always, we will publish our review of L&T Infotech IPO in the coming days. In the meantime, head to this discussion page on L&T Infotech IPO to stay updated with the latest discussion and grey market activity.