L&T Infotech public issue subscribed 1.23 times

By: | Updated: July 12, 2016 8:41 AM

The initial public offering (IPO) of L&T Infotech, which opened on Monday, was subscribed 1.23 times, with investors bidding for 1.51 crore shares compared with 1.22 crore shares on offer. The price band for the issue has been fixed at Rs 705-710 per share.

larsen L reuThe parent company, Larsen and Toubro, is targeting to raise Rs 1,242.5 crore from the IPO. Post issue, L&T’s stake in the company will come down by 10.3% to 84.6% from the current 94.9%. (Source: Reuters)

The initial public offering (IPO) of L&T Infotech, which opened on Monday, was subscribed 1.23 times, with investors bidding for 1.51 crore shares compared with 1.22 crore shares on offer. The price band for the issue has been fixed at Rs 705-710 per share.

The parent company, Larsen and Toubro, is targeting to raise Rs 1,242.5 crore from the IPO. Post issue, L&T’s stake in the company will come down by 10.3% to 84.6% from the current 94.9%.

Qualified institutional buyers (QIBs) bid for 61.70 lakh against 35 lakh shares reserved for them and their quota was subscribed 1.76 times. High net worth (HNIs) individuals bid for 5.04 lakh shares against 26.25 lakh shares on offer, just 0.19 times the quota.

p11g3

Retail investors, who were offered a discount of Rs 10, bid for nearly 1.37 times of their quota or 84.47 lakh shares against 61.25 lakh shares reserved for them.

On Friday, the company had allotted 52.50 lakh equity shares, aggregating to Rs 372.75 crore, to 22 anchor investors including HDFC Trustee, Birla Sun Life Trustee, ICICI Prudential, Reliance Capital, New India Assurance, Max Life Insurance, BNP Paribas, Tata Aia Life Insurance, Reliance General Insurance and Union Bank of India.

An anchor investor is a QIB who applies for shares worth Rs 10 crore or more through the book building process. The concept of an anchor investor was introduced by the Securities and Exchange Board of India (Sebi) in July 2009.

An anchor issue is held one day prior to the public issue and these investors must comply with a lock-in period of 30 days from the date of allotment.

Sebi guidelines say that a minimum of five and a maximum of 25 such investors will be permitted for allocation of up to Rs 250 crore. However, in case of allocations beyond Rs 250 crore, Sebi has approved that there can be 10 additional investors for every additional allocation of Rs 250 crore.

The IPO has 50% of the shares reserved for QIBs, 15% for HNIs and 35% for retail investors. Of the total shares reserved for the QIB category, 60% has been reserved for anchor investors on a discretionary basis, according to Sebi guidelines.

Five per cent of the QIB category, excluding the anchor investor portion, has been reserved for mutual funds on a discretionary basis.

L&T Infotech ended FY16 with revenues of Rs 5,908.1 crore, up 22.24%, and the net proft of Rs 938.1 crore, up 21.27%. Total expenses rose 22.47% to Rs 4,641.1 crore. Citibank is a big client and contributes 15% of the firm’s revenues.

In FY16, digital services accounted for 11.1% of its revenue. The company generates the majority of its revenue from banking, financial services and insurance, followed by energy and process, retail and pharma, automotive and aerospace, media and entertainment, and hi-tech and consumer electronics.

Citigroup Global Markets India, Kotak Mahindra Capital Company and ICICI Securities are the book running lead managers to the issue. On Monday, shares of L&T and its subsidiary L&T Finance Holdings closed at Rs 1,559.35 and Rs 78.15, up 1.80% and 1.63%, respectively, on the BSE.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition