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Sunday, September 11, 2016

L&T Technology Services Ltd. (LTTSL) IPO at a glance


Issue Highlights

Issue Period
12/9/16-15/9/16
Price Band (Rs.)
850-860
Issue Size(shares)
1,04,00,000
Issue Size (Rs. crore) #
894.4
Issue Type
100% Book built
Face Value (Rs.)
2
Listing
BSE,NSE
Industry
Engineering Research & development (ER&D)
Registrar
Karvy Computershare
Minimum Bid Quantity
16 shares
Maximum Retail Subscription
Rs. 1,92,640 (14 lots)
BRLM
Kotak Investment, BOFA ML,JM Financial ,SBI Capital
# derived figure

Issue Details


Offer for Sale:  up to 1,04,00,000 shares
Fresh Issue:   Nil
Equity Shares Outstanding Prior to the Issue:  10,16,90,392
Equity Shares Outstanding After The Issue #:  10,16,90,392

Objects of the Issue

This issue is purely stake sell by a promoter and no proceeds shall go towards the company. The object of the issue is to avail the listing benefits.

Industry Profile

ER&D (Engineering research & development) industry is also referred to as PES (product engineering services) or ESO (engineering services outsourcing ) industry. According to NASSCOM  global ER&D spend has grown at a CAGR of over 7 % over past 7-8 years.
The global spend of biggest 500 corporate spenders ER&D better known as G 500 ER&D spend was to the tune of 614 billion USD and the same constituted around 61 % of the total global ER&D spend.

Company Profile

LTTSL is a leading ER&D services providing company catering the needs of manufacturing, technology and process engineering companies. The company operates in 5 industry segments viz. transportation, industrial products, telecom, hi-tech process industry and medical devices.

Risks & Threats

      (1)    Being incorporated in June 2012 only, the company has limited operating history and financials of only 2 years are there at investors' disposal
      (2)    Concentrated sources of revenue : Around 63 % and 20 % of the revenue comes from North America and Europe respectively. The top 10 customers accounted for  around 36 % of the revenue
     (3)    The company has allotted shares to its promoters at much lower price of Rs. 281 on June 3,2016
     (4)    Though the company shall not directly be much affected  by Brexit but its clients might be significantly affected



Financial Profile #

Parameter
FY 16
PE Ratio
19.9
Net Profit Margin (%)
14.62
Total Liability to Net worth
.63
Price to Book Value
7.74
Post issue ROE (%)
38.9
TIE (Times Interest Earned)
374
AR collection Period (Days)
84
EV/EBITDA
15.25
M-Cap to Sales
2.91
Current Ratio
1.71
# using upper end of the price-band

Comparison with the listed Peers #


NPM (%)
ROCE(%)
ROE(%)
PE
LTTSL
14.62
53.53
38.9
19.9
Tata Elxsi Ltd.
14.39
38.32
40.13
46.78
Cyient Ltd.
18.74
13.87
13.43
23





# moneycontrol data

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