Likhitha Infrastructure IPO is very small in the size of only 61 crores. You must have heard about the IPOs in lakhs and crores while this one is very small in size. Today we will discuss the Likhitha Infrastructure IPO details and check whether you should invest in it or not.
Looking at the size of the IPO it should have been considered into SME IPO but the company has qualified in the mainboard IPOs.
Likhitha Infrastructure Company Details
The company is into the business of developing oil and gas pipeline infrastructure in India. The main business of the company is to provide oil and gas pipeline, city gas distribution projects as well as cross country oil and gas pipeline projects.
The company was incorporated in 1998 in Hyderabad is having a vast experience of 22 years with a nationwide presence across 18 states and 2 union territories in India. The company has a client base of ONGC, GAIL, Indian Oil, and HCG.
Mr. Srinivasa Rao Gaddipati and Ms. Likhitha Gaddipati are the promoters of the company.
Company Financials
| Particulars | 31-Mar-20 | 31-Mar-19 | 31-Mar-18 |
| Total Assets | 10,085.61 | 8,457.38 | 6,722.91 |
| Total Revenue | 16,279.02 | 14,054.68 | 8,860.56 |
| Profit After Tax | 1,987.93 | 1,785.51 | 716.22 |
EPS is 11
PE Ratio is 8.5
Debt to Equity Ratio is > 1
Likhitha Infrastructure IPO Details
| IPO Date | Sep 29, 2020 – Oct 1, 2020 |
| Issue Type | Book Built Issue IPO |
| Issue Size | 5,100,000 Eq Shares of ₹10 (aggregating up to ₹61.20 Cr) |
| Fresh Issue | 5,100,000 Eq Shares of ₹10 (aggregating up to ₹61.20 Cr) |
| Face Value | ₹10 per equity share |
| IPO Price | ₹117 to ₹120 per equity share |
| Market Lot | 125 Shares |
| Min Order Quantity | 125 Shares |
| Listing At | BSE, NSE |
IPO Objectives
- To meet the working capital requirements
- To meet the general corporate purpose
The promoter’s holding before the IPO is 99.96% and after the IPO it will be reduced to 74.11%
Pros and Cons of Likhitha Infrastructure IPO
| Pros | Cons |
| Diversified PAN India Presence | Company doesn’t have any listed Peers |
| Strong Client Base | Weak Financials |
| Futuristic business opportunities | Limited clientele |
| 20+ years of experience in the business | The company doesn’t have any long term contract |
| Being a small company it doesn’t have pricing power | |
| Being a very small company, it will never get big orders. | |
| Negative cashflow | |
| Small profit and big bank guarantee of 55 crores |
How to invest in Likhitha IPO
You can apply in Likhitha Infrastructure IPO online using either UPI or ASBA as payment method. ASBA IPO application is available in the net banking of your bank account. UPI IPO application is offered by brokers who don’t offer banking services. Read more detail about apply IPO online through Zerodha, Upstox, 5Paisa, Edelweiss, ICICI Bank, HDFC Bank, and SBI Bank.
The size of the IPO is just 61 crores which is considered as the very small size IPO. Financials of the company is not so good. So I would suggest not to invest in this IPO.
UPI IPO application is offered by brokers who don’t offer banking services. Read more detail about apply IPO online through Zerodha, Upstox, 5Paisa, Edelweiss, ICICI Bank, HDFC Bank, and SBIBank.
The Likhitha Infrastructure IPO opens on Sep 29, 2020 and closes on Oct 1, 2020.
The exact allotment date is not yet announced but the tentative date is 12th October 2020.
Should you invest into Likhitha Infrastructure IPO?
The size of the IPO it self says not to invest into it. Also the financials of the company is not so good as mentioned above. So I would suggest you should not invest in to this IPO. The company doesn’t have any long term projects or contracts so there is no guarantee of the future business/revenues.
The company is carrying a huge debt and there is no sure shot revenue stream. Not a single thing that goes in favour of this company. So I strongly recommend NOT to invest in this IPO.
Company Contact Details:
Likhitha Infrastructure Ltd
Flat No. 701, Plot No.8-3-940 and 8-3-940/A to E
Tirumala Shah Residency, Yellareddy Guda, Ameerpet
Hyderabad – 500073
Phone: 91 40-23752657
Email: info@likhitha.in
Website: http://www.likhitha.co.in/