About the L&T Technology Services: L&T Technology Services, a subsidiary of Larsen & Toubro, is an engineering services company that operates in the global
Engineering, Research and Development (“ER&D”) space.
Established in 2012, L&T Technology Services provides its services to clients in manufacturing, technology and process engineering industries. Most of these clients are based in North America and Europe. L&T Technology Services generated around 80.2% of its revenues in FY2016 from customers in these two regions.
L&T Technology Services offers design, development and testing services for the industrial products, medical devices, transportation, aerospace, telecom and process industries. The company serves customers across the product engineering life cycle from product conceptualization to implementation. Services include consulting, design, development, testing, maintenance and to-market integration services.
L&T Technology primarily operates in five industry verticals – Transportation (29.9% of revenues in FY2016), Industrial products (25.2%), Telecom and Hi-tech (19.8%), Process industry (18.7%) and Medical devices (6.3%).
According to the red herring prospectus (RHP), L&T Tech employed a total of 9,419 employees as of 30 June 2016, including more than 2,000 employees outside India. The company operates through 12 global delivery centres in India and overseas, 26
sales offices in India, North America, Europe, the Middle East and Asia and 31 labs in India.
L&T Technology Services IPO Detail
L&T Technology Services IPO is all set to hit capital markets on Monday (September 12) with public offer of 10.4 million shares of Rs 2 each in a price band Rs 850-860 per equity share.
The issue will close on September 15. Shares of the company are proposed to be listed on BSE as well as NSE.
Book running lead managers to the issue are DSP Merrill Lynch, Kotak Mahindra Capital Company, SBI Capital Markets and JM Financial Institutional Securities.
Objective of the L&T Technology Services issue
The motto of the issue is to get the benefits of listing the equity shares on the stock exchanges and to carry out the sale of up to 10,400,000 equity shares by the selling shareholder. The listing will increase the company’s brand name and
provide liquidity to the existing shareholders. L&T Technology Services will not get any proceeds from the public offer.
L&T Technology Services Financials:
For the financial year ended March 31, 2016, the company reported a net profit of Rs 434.24 crore, up 37.78 per cent, against Rs 315.18 crore last year. It had reported net profit of Rs 6.21 crore in FY2013-14. L&T Technology’s total income increased by 14.84 per cent to Rs 2,969.40 crore in 2015-16 as compared to Rs 2,585.62 crore in 2014-15. Operating profit
margin of the company improved in 2015-16 to 19.13 per cent from 14.93 per cent in 2014-15 on the back of depreciaton of rupee and higher manpower utilisation.
Company Promoters: The Promoter of our Company is L&T
L&T Technology Services IPO Issue Detail:
Issue Open: Opens on September 12, 2016 And closes on September 15, 2016
Price Band: Rs 850 – Rs 860 Per Equity Share
Total IPO size: 10,400,000 shares
Issue Type: Book Built Issue IPO
Bid Lot: 16 equity shares or multiples thereof (Tentative)
Face Value: Rs. 2 Per Equity Share
Retail Allocation: 35%
Listing At: BSE, NSE
Brokerage Firm Review on L&T Technology Services IPO:
Brokerage firm Angel Broking believes that L&T Technology trades at 21 times FY2016 EPS at upper end of issue price band. Angel Broking has given ‘Subscribe’ rating to the issue.
KR Choksey Shares and Securities is also positive on the public offer. The brokerage house said, “We like L&T Technology Services as a long term story and advise investors to ‘Subsribe’ the IPO of the company. We are positive on company due to
strong parentage, market growth opportunities, market penetration opportunities and likely higher share of new technologies going forward which will improve margins and drive future growth for the company.”
GEPL Capital: GEPL believes L&T Infotech stands to benefit from operating leverage and rising stability from international
economic advantages. L&T is trading at a discount to its domestic peers, it said adding: “We assign a Subscribe rating to
the IPO,” the brokerage said.
Reliance Securities: Discount to peers a booster – Subscribe
IIFL: IPO a long-term buy, huge listing gains – Subscribe
Antique Stock Broking: Digital contribution, L&T parentage hold key – Subscribe
Other IPO in in September