The initial public offer of Likhitha Infrastructure has been fully subscribed on the last day of the bidding process, September 29. The Rs 61.2-crore public issue has received bids for 4.28 crore equity shares against an offer size of 51 lakh equity shares, showed exchanges data.

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Retail investors have subscribed the issue 21 times. The reserved category of non-institutional investors witnessed 5.4 times subscription and that of qualified institutional buyers 45.3 percent.

The price band of the issue, which will close on October 1, has been fixed at Rs 117-120 per share.

The issue comprises a fresh issue of 51 lakh equity shares, representing 25.86 percent of post issue paid-up equity. The company aims to raise Rs 61.20 crore at a higher price band.

Also Read: Likhitha Infrastructure IPO opens today: Here are the key things to know

The proceeds of the IPO will be utilized by the company towards its working capital requirements so as to capitalize on the growing demand from the Oil and Gas sector and for general corporate purposes.

“The issue is valued at 12x FY20 EPS, which we believe it is extremely attractive. We are highly bullish on gas segment and gas distribution companies as the government’s focus is to develop gas-based economy in the country. This company is working for gas distribution companies. This Company has a huge opportunity to grow in the coming years. We recommend a Must Apply Invest rating for this IPO,” said brokerage firm Equity99.

Brokerage KR Choksey also recommended subscribing to the issue with a long-term perspective as it believes the recent government initiatives have provided profitable opportunities for work execution company like Likhitha.

The brokerage noted that India's pipeline network is expected to expand to around around 35,000 kms 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 kms per year.

“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, 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 said.

First Published:Sept 29, 2020 2:08 PM IST