Lakshya Powertech IPO: Here are 10 latest Key things you need to know

Lakshya Powertech IPO is set to open for subscription on October 16, 2024, and will remain open until October 18, 2024. This 3-day subscription period provides ample time for investors, including retail investors, qualified institutional buyers (QIBs), and high-net-worth individuals (HNIs), to evaluate and apply for shares in this offering. The IPO is being launched on the NSE SME platform, which focuses on smaller companies looking to raise capital for growth.

2. IPO Size and Structure

The company aims to raise approximately ₹49.91 Crores through its IPO, structured as a 100% Fresh Issue. This means that the funds raised will come from the issuance of new equity shares rather than selling existing shares held by current shareholders. The funds will be used for various purposes, including working capital and paying off existing borrowings, which will help in reducing the company’s debt burden.

3. Price Band and Market Lot

The IPO has a price band set between ₹171 and ₹180 per share, which gives investors a specific range within which to bid. The market lot size is set at 800 shares, meaning the minimum investment per application will be approximately ₹144,000 (at the upper price band). This fixed lot size encourages larger investment amounts and ensures consistency in the bidding process.

4. Allocation for Investors

The IPO allocation is structured to cater to different types of investors, with 35% of the shares reserved for retail investors, 50% for QIBs, and 15% for HNIs. This allocation ensures that retail investors have a significant opportunity to participate, while institutional investors can also engage meaningfully, thus balancing the interests of various investor groups.

5. Company Background

Lakshya Powertech Limited, incorporated in 2012 and based in Ahmedabad, Gujarat, specializes in engineering consultancy and contracting services. The company’s operations extend to Dadra and Nagar Haveli and cover critical sectors like oil and gas, power, renewable energy, and industrial services. Its reputation is built on delivering high-quality services across these industries, where it has successfully completed 138 major projects, showcasing its capability in managing large-scale contracts, including projects valued at ₹136.90 crores.

6. Financial Performance

The financial trajectory of Lakshya Powertech reflects significant growth over the years. In 2022, the company reported revenues of ₹34.21 Crores with a Profit After Tax (PAT) of ₹1.05 Crores. By 2024, revenue surged to ₹149.42 Crores, with PAT reaching ₹15.68 Crores. The substantial increase in revenue and profitability indicates the company’s effective business strategies and successful execution of projects.

7. IPO Objectives

The proceeds from the IPO will be utilized primarily for three key objectives: (1) Prepayment or repayment of outstanding borrowings, which will help improve the financial stability of the company; (2) Funding working capital requirements, ensuring sufficient liquidity for day-to-day operations; and (3) General corporate purposes, allowing flexibility in managing the company’s future strategic initiatives.

8. Valuation Metrics and Financial Ratios

For the fiscal year 2024, Lakshya Powertech exhibits strong financial ratios, including a Return on Equity (ROE) of 77.43% and a Return on Capital Employed (ROCE) of 37.00%. The company maintains a Debt to Equity Ratio of 0.91, indicating a manageable level of debt. The Earnings Per Share (EPS) stands at ₹20.74, with a robust PAT margin of 10.08%. These metrics reflect the company’s efficiency and profitability, presenting it as a potentially lucrative investment.

9. IPO Timeline

The timeline for the Lakshya Powertech IPO is as follows: It opens for subscription on October 16, 2024, and closes on October 18, 2024. The basis of allotment will be announced on October 21, 2024, followed by refunds and the credit of shares to successful bidders’ Demat accounts on October 22, 2024. The listing of the shares on the NSE SME platform is expected to occur on October 23, 2024.

10. How to Apply for the IPO

Investors can apply for the Lakshya Powertech IPO using the ASBA (Applications Supported by Blocked Amount) method through their bank accounts. Applications can be made online or offline, with offline forms available for download from the NSE website. This flexible application process caters to different investor preferences and ensures wider accessibility for all interested parties.