Likhitha Infrastructure IPO Analysis – A Bet On The Entire Gas Sector

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Brief‌ ‌about‌ ‌Company:

Let’s dig deeper into Likhitha Infrastructure IPO Analysis.

Established in the year 1998, The Company is primarily an infrastructure oriented company with a portfolio across India and the Indian sub-continent. Likhitha Infrastructure limited is the first company in India to execute the ‘Trans-National’ Cross country Hydrocarbon Pipeline Project between India and Nepal. 

With over 2 decades of existence, the company had vide varieties of experience and has spread its geographical presence across 16+ states and 2 Union Territories in India.

With a prominent presence in states such as Andhra Pradesh, Bihar, Chandigarh, Delhi, Gujarat, Haryana, Kerala, Madhya Pradesh, Orissa, Telangana, Uttar Pradesh, West Bengal, etc. 

Likhitha Infrastructure is currently working will the major Public Sector Undertaking’s (PSU’s) and Certified Graduate Builder (CGB’s) all around India. The Company is certified with ISO 9001:2015 by International Certification Services Pvt Ltd for specialization in the field of Design, Construction of Cross-country pipelines, City Gas Pipelines, and Civil Constructions.

The company has three major business lines:

  • Cross Country Pipelines and associated facilities.
  • City Gas Distribution including CNG Stations; and
  • Operation & Maintenance of CNG/PNG services.

What are its business portfolio allocations?

The Company is amongst the major Oil & Gas Pipeline infrastructure service provider for leading Oil & Gas Distributors in India. The Company has been engaged in various businesses like Pipeline Laying, providing comprehensive erection, testing, and commissioning, and others. 

Likhitha Infrastructure has executed many projects over the years. The company has an excellent track record of timely execution and quality delivery to its clientele base.

With an experienced team which comprises of personnel having technical, operational, and business development experience. The Likhitha Infrastructure has been able to provide with best quality & customer satisfaction. 

As far as business competitiveness is concerned. There is no listed company in India which are engaged in the same line of business and provision of service that ‘Likhitha Infrastructure Ltd’ provides. Hence, a certain amount of competitive edge be noted.

Likhitha Infrastructure main services are;

  • Terminals construction.
  • Cross Country Pipelines.
  • Compressed Natural Gas (CNG) station. 
  • Oil & Gas Pipelines.
  • City Gas Distribution Projects.
  • Operation and Maintenance (O & M) Services.

Who is the owner of Likhitha Infrastructure Limited?

Likhitha Infrastructure Limited is led by Mr.Gaddipati Srinivasa Rao. The Management is led with a wide technical experience of over 3 decades. And, Mr. Srinivasa Rao Gaddipati and Ms. Likhitha Gaddipati are the promoters of the company. Together, the promoters own 99.96% of ‘Likhitha Infrastructure’ – Pre IPO. 

The IPO is at a price band Rs.117 to Rs.120 per equity share of the face value of Rs.10 each. The floor price is 11.70 times of the face value and the cap price is 12 times of the face value. Bids can be made for a minimum of 125 equity shares and in multiples of 125 equity shares thereafter.

Also Watch: Likhitha Infrastructure IPO Analysis

What are the company’s major Strengths & Competitive advantages?

Apart from being into the business for over 2 decades with management experience of over 3 decades. The Companies major strength are as follows;

  • Has a strong presence with significant experience.
  • Equipped with an efficient Business Model.
  • Equipped with a diverse fleet of sophisticated equipment.
  • Strong financial performance over the years.
  • Scalability of operations, efficiency in management.
  • Strong project execution capabilities alongside an experienced team to execute.
  • Long term relationship with clients and repeat business.
  • Highly experienced Management Team.

How’s the company’s financial performance?

For the Financial Year (FY) 19-20; Likhitha Infrastructure had revenue of Rs.163 crore with a Compound Annual Growth Rate (CAGR) for the past 3 FY’s of 22%. The company has given a double-digit growth rate over the years. 

Financial figures:

Sl.No Particulars March 31, 2020 March 31, 2019 March 31, 2018
1 Revenue (In Rs. Crores) 162.79 140.54 88.60
2 EBITDA (In Rs. Crores) 31.22 29.97 12.70
3 EBITDA Margin (In %) 19.18% 21.33% 14.34%
4 Profit After Tax (In Rs. Crores) 19.87 17.85 7.16
5 PAT Margin (In %) 12.21% 12.70% 8.08%
6 Average ROCE (In %) 58.53% 73.55% 48.78%
7 Average RONW (In %) 33.06% 43.16% 24.83%
8 EPS (In Rs. Before Bonus Effect) 13.59 39.68 15.92
9 EPS (In Rs. After Bonus Effect) 13.59 12.21 4.9
10 Net Asset Value Per Share (In Rs. Before Bonus Effect) 47.83 111.81 72.07
11 Net Asset Value Per Share (In Rs. After Bonus Effect) 47.83 34.4 22.17
12 Operating Cash Flow (In Rs. Crores) 19.15 3.18 4.01
13 Debtors (In number of days) 31.36 36.53 79.71
14 Working Capital (In number of days) 31.3 34.09 4.72
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Likhitha Infrastructure Limited – IPO details;

Sl.No IPO Issue details Information
1 Issue Open date 29th September, 2020
2 Issue Close date 1st October, 2020
3 Share price band Rs.117 – Rs.120 per share
4 Issue Size (in count) 51,00,000 Equity shares
5 Fresh Issue 66,26,506 Equity shares
6 Listing Site NSE & BSE
7 Total value Rs.61.20 crore at upper end valuation.
8 Trading hours 10:00 AM to 5:00 PM
9 Retail bid – Minimum share 1 lot (125 shares)
10 Retail bid – Minimum amount Rs.15,000/-
11 Retail bid – Maximum share 13 lots (1,625 shares)
12 Retail bid – Maximum amount Rs.1,95,000/-
13 Face Value Rs.10 per share
14 Promoter stake Pre IPO (99.96%); Post IPO (74.11%)
15 Finalisation of Basis of Allotment 7th October, 2020
16 Initiation of Refunds 8th October, 2020
17 Credit of Shares to DEMAT Account 9th October, 2020
18 IPO Share listing date 12th October, 2020

Disclaimer: All the information on this website is published in good faith and for general information purpose only.

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Rakshith Pai
Rakshith is a CA aspirant with half a decade of investing experience. He manages a private fund management service, AUG Funds. Wherein, AU denotes Gold and AG denotes Silver, the two most precious metals on Earth.
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