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Likhitha Infrastructure IPO Review, Issue Detail, DRHP

Likhitha Infrastructure IPO Review

Likhitha Infrastructure Ltd was incorporated in the year 1998. In India, it is an oil as well as gas pipeline infrastructure service provider. The company is attached to the business of oil & gas pipelines, city gas distribution projects, Cross-Country Pipeline Projects, and operations and maintenance services as well. Likhitha Infrastructure is the first company that has executed the first Trans-National Cross Country Hydrocarbon Pipeline Project between two countries India and Nepal. The article consists of Likhitha Infrastructure IPO Review, Issue Detail, DRHP.

Likhitha Infrastructure IPO Details

IPO Opening Closing DateSep 29, 2020 – Oct 1, 2020
Issue TypeBook Built Issue IPO
Issue Size5,100,000 Eq Shares of ₹10
(aggregating up to ₹61.20 Cr)
Fresh Issue5,100,000 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 Lot125 Shares
Min Order Quantity125 Shares
Listing AtBSE, NSE
Company DRHP

Company Details

  • The company has almost more than 20 years of business existence. They have spread their geographical presence across more than 16 states and 2 Union Territories in India. These territories include Delhi, West Bengal, Telangana, Gujarat, Andhra Pradesh, Madhya Pradesh, Bihar, Chandigarh, Haryana, Kerala, Orissa, Uttar Pradesh, etc.
  • Besides their wide geographical areas and experience, they have a strong client base in India. The top client base includes both the private and public players like ONGC, HCG, IndianOil, GAIL, etc.
  • The company has authorized share capital of Rs. 200,000,000 and its paid-up capital is Rs. 146,250,000.
  • Likhitha Infrastructure has been in the construction business for more than 22 years.

Competitive strength

Wide geographical area: As I have mentioned earlier that the company has a wide geographical business area. They have their branches in more than 16 states and 2 union territories in India.
Strong client base: Besides having a wide geographical area they have a strong client base. Their clients include both private and public players such as ONGC, Indian oil, HCG, GAIL, etc.
Efficient business model: The company business model is pretty effective. Their skilled management is able to create an efficient business model.
Strong project execution capabilities: Due to their efficient management, project execution capabilities are very strong.

In short, the points of competitive strength are as follows:

  1. Likhitha Infrastructure has a strong presence in India along with significant experience
  2. It has a strong financial performance
  3. Scalability of operations
  4. Strong Project execution capabilities
  5. Long term relationship with clients and repeat business
  6. Highly experienced Management Team
  7. Diverse fleet of sophisticated equipment

Company Promoters:

Mr. Srinivasa Rao Gaddipati and Ms. Likhitha Gaddipati are the promoters of the company.

Objects of the Issue:

The net proceeds from the IPO will be used against the following objectives;
• To meet the general working capital requirements of the business.
•Another objective is to meet general corporate purposes.
• To meet IPO issue expenditures.

Business Classification

Their business operations can be broadly classified under the following heads:

PIPELINE INFRASTRUCTURE: Their pipeline infrastructure business comprises of undertaking projects for laying of pipelines in Cross- Country Pipeline projects as well as for setting up City Gas Distribution network and construction of associated facilities.

OPERATION & MAINTENANCE SERVICES: Their Company also provides Operations & Maintenance Services to CGD Companies. Their Operation and Maintenance (O&M) Services business includes management services for CGD networks, other repairs, modernization, scheduled shutdowns, as well as overhauling and maintenance of existing pipelines.

Operation & Maintenance activities involves deploying manpower and tools required for replacement of existing pipelines, emergency repair and maintenance, shifting and compressor hook up of pipelines with associated facilities.

Likhitha Infrastructure Ltd

Likhitha Infrastructure Business Process

Contracts are primarily awarded through “Competitive Bidding” Tender method based on combination of factors amongst which technical qualifications, proposed project team, schedule, past performance on similar projects, the bid amount are the major determining factors. The process requires each bidder to prequalify for the activities by meeting criteria that includes technical capabilities and financial strength.

Likhitha Infrastructure Limited: Business strategies

  • Continue to expand their operations
  • Further growth in their O&M services offerings
  • Retaining Skilled Manpower
  • Optimum Utilization of Resources
  • Continue to develop Client relationship and expand their Client base
  • Focus on Performance and Project Execution
  • Continue to focus on safety and environment standards

Company Financials:

ParticularsFor the year/period ended (₹ in lakhs)
Total Assets10,085.618,457.386,722.91
Total Revenue16,279.0214,054.688,860.56
Profit After Tax1,987.931,785.51716.22

Likhitha Infrastructure IPO Review

Let’s look at the financial review. The company has made a consistent profit throughout the years. For fundamental updates, you may go through the company’s DRHP (draft red herring prospectus). Fundamental ratios like PE (price to earnings), EPS (earnings per share), RoNW(return on net worth), BV, etc are some of the crucial things to check. As per our research, many top brokers and IPO analysis sites have ranked Likhitha Infrastructure IPO Review a NEUTRAL view. If you want to get more security about the IPO you may check NSE bid details on the day of opening and also grey market premium from our sites. Investors may subscribe to it for the long term.

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