L&T Technology sets IPO price Band at Rs 850-860

L&T TechWith the aim of raising up to Rs 894 crores, L&T Technology Services, which is a unit of construction giant Larsen & Toubro (L&T), has decided to set the price band of its upcoming initial public offering (IPO) at a price band of Rs 850.00-860.00 apiece. The 1.04-crore-share issue will open on 12th September 2016.L&T is selling a stake of 10.2 per cent in the engineering, research and development services company in this initial public offer (IPO). The investors are required to bid for at least 16 shares in the issue and its multiples. According to market experts the IPO price valuations are higher compared to its peers such as Tata Elxsi, KPIT Technologies and Cyient.

A brief Peer ComparisonCyient share price is currently trading at Rs 479.60 apiece on NSE, down by 0.52 per cent. The share price opened at Rs 490.00 from previous closing of Rs 482.10.Tata Elxsi share price however, is trading on the greener side of the market. It is at Rs 1,552.10 on NSE, up by 0.96 per cent.KPIT share price is up by 1.20 per cent and is trading at Rs 130.60 apiece.

Experts SpeakAccording to a market analyst when we look at the current PE ratio (price to earnings), L&T Technology is trading at 20 times trailing. At PE of 14 times, Cyient is much cheaper. KPIT is also trading cheaper when compared to L&T Technology.L&T Technology Services is expected to grow to $1-billion by the end of its five-year strategic plan with 20-25 per cent of the growth coming from acquisitions, group chairman AM Naik said in a pre-IPO media conference on Tuesday. L&T’s Naik said the company’s order pipeline is strong and also has a demand for jobs equivalent to 700 additional people.The market experts also added that when we look at both L&T Infotech and this company, they are priced quite high. It is doubtful if the stock will touch the preset offer price. There could also be questions on the project execution capability front.Though L&T Technology deals with a more niche set of products and services, the peers of the Company Tata Elxsi and Cyient are both relatively older players, said Nagaonkar.

The Company at a GlanceLT Technologies was established with a philosophy of providing manufacturers as well as service oriented corporations with clear and accurate data concerning liquid treatment and environmental issues. The Company has been providing excellent services for over 18 years. Through Innovation and Technology, the Company provides the significant engineering data required for making comprehensive decisions.

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