Latent View Analytics shares made a spectacular listing on the stock exchanges today despite bearish market sentiment.
Latent View Analytics shares made a spectacular listing on the stock exchanges today despite bearish market momentum early in the day. Shares of the company opened for trade at Rs 530 per share, up 169.04% or Rs 333 apiece from the IPO price of Rs 197 per share. At the end of the day’s trade, the stock was down 8% from the listing price at Rs 488.6 per share, however, it was still 147% above IPO price. The Rs 600-crore IPO was heavily oversubscribed by investors earlier this month with the overall subscription of the issue reaching a massive 326.49 times the issue size. Latent View is the first scrip to make its stock market debut after Paytm’s abysmal listing at the end of last week.
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The IPO of Chennai-based Latent View Analytics was subscribed 850 times by Non-Institutional Investors (NII) while Qualified Institutional Buyers (QIB) had bid for the IPO 145 times the reserved portion. Retail participation was also strong at 119 times the reserved quota. The IPO was a mix of a fresh issue of equity shares worth Rs 474 crore and an offer for sale (OFS) by existing shareholders worth Rs 126 crore. Post-IPO, the promoter shareholding will be trimmed to 68.11% from the current 79.3%. The public shareholding will increase to 31.89% from 20.7%.
In terms of valuations, analysts believe Latent View is reasonably priced. “The IPO is valued at 42.6x FY21 earnings and 43.7x FY22 annualized earnings, which look to be reasonably priced. LVA states Happiest Minds Tech as its peer, which trades at an exorbitantly high valuation at 115x FY21 earnings,” said Reliance Securities in a note. The brokerage firm had a ‘subscribe’ rating to the issue.
Analysts at Choice Broking had highlighted that Latent View was priced at a discount to peers but demanded valuations were at a premium to sector P/E multiple. “At the higher price band of Rs. 197, LVAL is demanding a P/E multiple of 42.8x, which is at significant discount to its sole peer company. However the demanded valuation is at a premium to sector P/E multiple,” they said while pinning a ‘subscribe’ rating to the IPO.