Likhitha Infrastructure IPO: Issue opens today; here is what Anil Singhvi has recommended
Indian markets are abuzz with action on Tuesday as far as Initial Public Offerings (IPO) are concerned. There are as many as three IPOs that have opened today. While, two of them are big IPOs - Mazagon Dock Shipbuilders and UTI AMC - the third one - Likhitha Infrastructure - is a relatively smaller IPO with plans to raise over Rs 61 cr. In this situation of plenty, investors must be wondering what they should do
Indian markets are abuzz with action on Tuesday as far as Initial Public Offerings (IPO) are concerned. There are as many as three IPOs that have opened today. While, two of them are big IPOs - Mazagon Dock Shipbuilders and UTI AMC – the third one - Likhitha Infrastructure - is a relatively smaller IPO with plans to raise over Rs 61 cr. In this situation of plenty, investors must be wondering what they should do. They should not fret, as Zee Business Managing Editor Anil Singhvi has revealed what they should do with this issue!
Unlike before, where the small IPOs attracted a lot of investor attention, the bigger ones are getting more traction now, the Market Guru revealed. Institutional investors are now a big stakeholder in the IPOs. He said that it is a matter of courage to bring an IPO of Rs 60 cr.
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Another important aspect is that this IPO has come in infrastructure space, which is not in favour at the moment.
The IPO closes on 1 October. The price band for shares is between Rs 117-Rs 120 per equity share.
He said that the company looks good on paper, though the real story can be known only after it gets listed. The balance sheet is strong with a robust order book, Singhvi said. The valuations are also reasonable with improving cash flows.
The point however, is that if everything is good then why a public issue for working capital requirement? It is a small company. It is very difficult to know the strengths of the company with just Rs 237 cr market capitalisation.
The promoters are experienced and the company is into the business of laying gas pipelines. It will be difficult to form an opinion on what will happen on listing for such a small company.
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Who should invest in Likhitha Infrastructure IPO?
Investors with a very high risk appetite can put their money in it, said the Market Guru. He said that it is unlikely that the institutional investors would put their money it. So, it will entirely be the call of the investors themselves whether they should put their money into this IPO, Singhvi added.
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