The IPO of Hyderabad-based Oil and
Gas Pipeline Infrastructure Service Provider Company Likhita Infrastructure
Limited has also opened from September 29, 2020. Investments can be made in
this till October 7, 2020. The company aims to raise Rs 61.20 crore through an
IPO. Uniston Capital Private Limited is the book running lead manager for the
issue. The price band per share for the IPO has been fixed at Rs 116 to 120.
There will be a fresh issue of up to 51,00,000 equity shares in this IPO, which
is 25.86 per cent of the shareholding after the issue.
The company was founded by Srinivasa
Rao Gaddipati and his daughter Likhita Gaddipati is a co-promoter. The company
has over two decades of experience in laying pipeline networks and building-related facilities and providing operation and maintenance services to city gas
distribution companies. The company's projects are spread across 16 states and
2 union territories of Union of India. As of July 31, 2020, the company's order
book was 663 crore rupees. The company had a profit of Rs 19.87 crore in the
fiscal year 2019-20.
Experts are of the opinion that it is
a courageous job to invest money in small companies. Earlier people were
interested in investing in small companies. Now the bigger IPO comes, the
bigger the response is. Funds and FIIs have become big players of IPOs. It is
courageous to bring an IPO of 60 crores in such a market. Especially the IPO
bringing infra sector which is not currently in trend. No one is interested in
infra. Despite this, the company has dared to bring an IPO. Lead managers also
do not have as strong a lead role.
According to Anil Singhvi, managing
editor of Zee Business, the company is good on paper. However, it is only when
the company is listed or talking to the management that the company gets an
idea. But, the balance sheet is visible at the moment. Much better than that.
The order book is very strong. Cash flow is improving. Valuations are not very
expensive. These are some good things. But, the problem is that when everything
is good, then why only bring IPO of working capital. It should not be needed.
Is a very small company. There is a market cap of only 237 crores. It is very
difficult for a company with such a small market cap to guess what will happen
to the IPO.
According to Anil Singhvi, the
company is good on paper. However, it is only when the company is listed or
talking to the management that the company gets an idea. But, the balance sheet
is visible at the moment. Much better than that. The order book is very strong.
Cash flow is improving. Valuations are not very expensive. These are some good
things. But, the problem is that when everything is good, then why only bring
IPO of working capital. It should not have been needed. Likhitha Infrastructure
Ltd is a very small company. There is a market cap of only 237 crores. It is
very difficult for a company with such a small market cap to guess what will
happen to the IPO.
According to Anil Singhvi, the
promoters are good, the gas and oil pipeline works. Business is good. But, it
is very difficult to give your opinion on such a small company what will happen
after listing. The purchase of funds will not come. So whatever has to happen
has to be in the middle of retail investors. Those who will invest money in IPO
keep in mind that anything can happen. If you want to invest money just by
looking at the balance sheet, then you can take a chance. Only those who take
more risk should invest. If you want to invest money after seeing the size of
the company, then you can leave. There is a neutral view, only those who can
take the risk, look at the balance sheet and invest that money. This will be
your call completely.
Source: Zee Business
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