Likhitha Infrastructure IPO comprises of a fresh issue of up to 51 lakh equity shares in the price band of Rs 117 and Rs 120. The size of Likhitha Infrastructure IPO at the upper price band is around Rs 61 crore. The proceeds of the IPO will be utilised by the company towards its working capital requirements so as to capitalise on the growing demand from the oil & gas sector as well as for general corporate purposes.

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Updates

LIKHITHA INFRA IPO EXTENDED TILL 7TH OCTOBER WITH REVISED PRICE BAND OF RS 116/- TO RS 120/-. There may be need to review the Investment made in IPO. In view of this development Iam likely to withdraw my IPO application in the IPO as a risk averse measure.

Likhitha Infrastructure IPO Details

Open Date29th Sep 2020
Close Date1st Oct 2020
Price BandRs. 117 – Rs. 120 per share
Issue Size Fresh Issue 5,100,000 Eq Shares 
Issue Size (cr) ₹61.20 Crore
Lot Size125 equity shares 

About Likhitha Infrastructure

  • Likhitha Infrastructure i
  • Likhitha is an Oil and Gas infrastructure service provider with focus on laying pipeline networks along with construction ofassociated facilities and providing operations & maintenance (O&M) services for CGD projects in India.
  • It has executed projects in more than 16 states and two UTs. I
  • it has successfully laid 600 kms of O&G pipelines
  • The company was also parft of the d with the execution of the first ever TransNational Cross-Country Pipeline of South-East Asia connecting India to Nepal in 2019. Moreover, for the on-going projects,
  • it has laid another 800kms of pipeline network.
  • • Likhitha’s client base comprises of established players in the O&G industry, both in public and private sector. Prominent
  • names include GAIL (India) Ltd. (GAIL), Bharat Petroleum Corporation Ltd., GAIL Gas Ltd., Hindustan Petroleum Corporation
  • Ltd., Indraprastha Gas Ltd. (IGL), Indian Oil-Adani Gas Pvt. Ltd., Indian Oil Corporation Ltd. (IOCL), Oil and Natural Gas
  • Corporation, Torrent Gas Pvt. Ltd. etc. IGL is the customer of the company since last two decades and is among top three
  • clients (others are GAIL and IOCL).
  • 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.

Likhitha Infrastructure: Financials

Particulars / Rs. CrFY20FY19FY18
Revenues161.24139.4887.08
OP29.6728.9111.17
PBT26.7725.310.93
PAT19.8817.867.16
Share Capital14.63
EPS (Rs)*13.5912.214.9
post issue equity 19.73
FV10
IPO Price120
EPS  Fy2010.08
PE FY2011.91
Market Cap in Rs. Crore 237
Mcap/Sales1.47

Pros

  • The Company is working on multiple projects simultaneously which range from Cross-Country pipelines projects to City Gas Distribution projects and providing O&M services
  • one of the well-established oil & gas pipeline infrastructure companies in India with diversified operations in Karnataka, Delhi-NCR, West Bengal, Gujarat, Goa, Andhra Pradesh, Kerala, Tamil Nadu, Telangana, Madhya Pradesh, Jharkhand, Bihar, Chandigarh, Haryana, and Uttar Pradesh.
  • 20 years of experience and operations in this field.
  • Good contacts with local clients and suppliers.
  • Established track record for successful completion of the projects undertaken by us.
  • There are few gas pipeline infrastructure companies, having good track record of timely delivery of supply chain in all the business areas.

Cons

  • Due to long-term nature of many of its projects, compamy faces various implementation risks
  • Larger players may offer competition
  • Large capital and Bank Peformance Gurfantees

Likhitha Infrastructure IPO: Assessment

  • The natural gas demand in the country is expected to grow significantly at a CAGR of 6.8% from 242.6 MMSCMD (Million Metric Standard Cubic Meter Per Day) in 2012-13 to 746 MMSCMD in 2029-30.
  • Likhitha Infrastructure is one of the well-established oil & gas pipeline infrastructure companies in India with diversified operations spread across various Geographical regions in the country.
  • As on July 31, 2020, the Company’s order book size was approx. Rs. 662 Crore
  • The company executed 10.75″ OD x 69 Kms Petroleum Product Pipeline for the first-ever Trans-National Cross-Country Pipeline of South-East Asia connecting India to Nepal, in the Year 2019, for the supply of petroleum products.
  • There are no comparable peers and good growth is expected in this segment. Players like L&T, Kalpataru Power have presence in this field but this is not their major area of focus at this moment.
  • Jaihind Projects, a company that was engaged in similar line of laying piplelines for the O/G industry turned sick and was refered to NCLAT.
  • The revenues of Likhitha Infrastructure in FY20 were Rs 161.24 crore (+16%). The OPM was lower but PAT was aided by lower rate of taxation and was up 11% to Rs 19.88 crore.
  • On the fiully diluted post issue equity, the Likhitha Infrastructure IPO is beinfg offered a a PE of 11.9 at upper price band of Rs 120.
  • I intend to apply in Likhitha Infrastructure IPO.
  • LIKHITHA INFRA IPO EXTENDED TILL 7TH OCTOBER WITH REVISED PRICE BAND OF RS 116/- TO RS 120/-. There may be need to review the Investment made in IPO in light of this development. In view of this development Iam likely to withdraw my IPO application in the IPO as a risk averse measure.
  • Do check this page for any last minute updates

Standard disclaimer:  I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2)  Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors.  I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or  leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.