Larsen and Toubro Technology Services initial public offering opened on Monday at a price band of Rs 850-Rs 860. The company is expected to raise around Rs 900 crore. The technology arm of Larsen and Toubro has allotted 31.2 lakh equity shares to anchors at Rs 860 per equity share aggregating to Rs 268.32 crore, according to its press release. As its IPO opened, L&T Group Executive Chairman AM Naik told CNBC-TV18 that the value proposition by Larsen and Toubro Technology differentiated from immediate peers. He further added, “IPO is priced at a very attractive price band.”
Naik further told CNBC-TV18 that he expects 15 per cent annual growth for L&T Technology and hopes to double its revenues within 5 years.
Incorporated in 2012, L&T Technology Services Ltd is Mumbai based third-party ER&D (Engineering, Research and Development) service provider. L&T Tech provide services to manufacturing, technology and process engineering companies to help them develop and build products, processes and infrastructure required to deliver products and services to their end customers.
Brokerage house KRChoksey – Institutional Research is bullish on the IPO and recommends a long-sterm subscription. We take a look at 5 points on why it is bullish
1. As a pure Engineering, Research and Development player, L&T Technology has an advantage over general IT services companies because of it’s focus on engineering services and end-to-end service offering, which the management believes appeals to ER&D spend decision makers.
2. The company’s size and scale, multi-domain presence, specialisation, practice maturity, and focus on innovation and IP, combined with ability to handle innovative and complex projects, provides it with a competitive advantage over other players in the ER&D space.
3. The company’s end-to-end services also differentiate it from competitors in key markets where its competitors are either staffing companies with higher costs or are not pure-play and end-to-end service providers.
4. The company is focused on driving innovation and adopting solutions in line with technological trends. The company’s culture of innovation since its establishment has enabled it to expand the range of offerings to customers and improve the delivery of solutions and products.
5. The company has a strong L&T parentage and long history of engineering expertise, which provides it with a competitive advantage in attracting talent, benefiting from Promoter’s global network, exploring potential business opportunities, corporate governance practices and acquiring direct access to senior decision makers in potential end customers.