Lakshya Powertech Limited is poised to launch its Initial Public Offering (IPO), aiming to raise ₹49.91 crores through a fresh issue of 27.72 lakh shares. The subscription period for this IPO opens on October 16, 2024, and will remain open until October 18, 2024. The allotment is anticipated to be finalized by October 21, 2024, with a tentative listing date set for October 23, 2024, on the NSE SME.

IPO Details

The price band for the Lakshya Powertech IPO is fixed between ₹171 and ₹180 per equity share, with a minimum lot size of 800 shares. This means that retail investors will need to invest a minimum of ₹1,44,000, while High-Net-Worth Individuals (HNIs) must invest in at least 2 lots (1,600 shares), amounting to ₹2,88,000.

Lead Managers and Registrar

The IPO is managed by GYR Capital Advisors Private Limited as the book-running lead manager, while KFin Technologies Limited acts as the registrar for the issue. Giriraj Stock Broking Private Limited will serve as the market maker for the Lakshya Powertech IPO.

Grey Market Premium (GMP)

Currently, the Grey Market Premium (GMP) for the Lakshya Powertech IPO is estimated to be between ₹76 and ₹80. This suggests a potential premium based on market demand. However, it’s important to note that the GMP should be viewed for educational purposes only, as it reflects unorganized trading conditions and does not guarantee listing gains.

Live Subscription Status

The Lakshya Powertech IPO will be open for subscription starting October 16, 2024, with real-time updates available for those interested in tracking the live subscription status.

Anchor Investors Report

Lakshya Powertech has successfully raised ₹13.39 crores from anchor investors at a price of ₹180 per share, allocating 7,44,000 equity shares. This reflects substantial institutional interest in the IPO.

Allotment Date and Process

The allotment date for Lakshya Powertech IPO is scheduled for October 21, 2024. Investors can check their allotment status by visiting the registrar's website and entering their application number, PAN, or DP Client ID.

Financial Performance Overview

Lakshya Powertech has shown significant revenue growth:

Revenues from operations for the period ended August 31, 2024, were ₹5,815.38 lakhs, an increase from ₹14,941.92 lakhs in FY 2024, ₹5,311.21 lakhs in FY 2023, and ₹3,421.39 lakhs in FY 2022.

EBITDA figures also indicate robust performance, with ₹947.27 lakhs for the period ended August 31, 2024, compared to ₹2,318.64 lakhs in FY 2024, ₹477.66 lakhs in FY 2023, and ₹201.70 lakhs in FY 2022.

Profit after tax for the period ended August 31, 2024, stood at ₹597.11 lakhs, up from ₹1,567.77 lakhs in FY 2024, ₹271.09 lakhs in FY 2023, and ₹104.58 lakhs in FY 2022.

For the Lakshya Powertech IPO, the company is issuing shares at a pre-issue EPS of ₹21.75 and a post-issue EPS of ₹15.54. The pre-issue P/E ratio is 8.27x, while the post-issue P/E ratio is 11.58x, compared to an industry average P/E ratio of 38.71. The company’s Return on Capital Employed (ROCE) for FY 2024 is 36.56%, and the Return on Equity (RoE) is an impressive 81.77%.

Investment Considerations

The financial metrics suggest that the IPO is reasonably priced. However, there are several factors that investors should consider:

Use of IPO Proceeds: The funds raised from the fresh issue will be utilized for prepayment of borrowings (₹450 lakhs), working capital requirements (₹3,000 lakhs), and general corporate purposes.

Market Demand: The current Grey Market Premium indicates a potential listing gain of 40% - 44%, which is attractive for investors looking for short-term gains.

Industry Position: Lakshya Powertech specializes in EPC services for the oil, gas, power generation, and renewable energy sectors, positioning itself as a key player in these growing industries.

Conclusion

Considering the strong financial performance, the anticipated Grey Market Premium, and the overall market conditions, we recommend investors to apply for the Lakshya Powertech Limited IPO. This IPO presents an opportunity for both short-term listing gains and long-term investment potential, given the company's focus on sustainable and tailored solutions in critical engineering and process equipment.

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