Tag: Likhita Infra IPO

Economy · Premium Stocks · Stocks

Small Insight into Infra Company

Its real ALPHA

Likhitha Infra (approx 33 yr old company) is an Oil Gas Pipeline Infrastructure provider in India. Operations include Cross Country pipelines and associated facilities, City Gas Distribution including CNG stations, and Operation & Maintenance of CNG/PNG services.

Strong presence in more than 16 states and 2 Union Territories in India.

Two major domains, if we divide the operations , are Pipeline Infrastructure Projects and O&M services (Operation and Maintenance)

Revenue breakdown for the domains are highlighted below (for last 4 Financial years)

Strengths

Long standing relationships with domestic marquee customers.

Efficient business model

Strong project execution capabilities

Diversified geographical presence in India

Strong Technical Qualification to bid for new projects

Strong promoter holding showing skin in game

Good ROCE, stable and improving PAT margins and EBITDA

Highly experienced Management Team

Triggers for company in coming quarters

CGD is increasing in India and company is at right place for its business to grow with Strong client base and on top of that company has Strong Technical Qualification to bid for new projects which is visible in orders won recently

Company has received orders worth Rs. 250 Crores (approx.) excluding GST from various City Gas Distribution Companies during the
quarter from October 2021 to December 2021.

Till Aug. 2021 company has an outstanding order book of 1020 cr giving good revenue visibility. In Oct-Dec 2021 , company received 250cr of additional orders

As per the recent Government policies, PNGRB has increased the number of Geographical Areas (GAs) to 228 comprising of 402 districts spread over 27 States and Union Territories, covering 70% of Indian population and 53% of its area. These recent Government initiatives have provided lucrative opportunities for Oil & Gas infrastructure service providers

Recent policy moves, including a wide-scale rollout of CNG and the expansion of gas infrastructure including LNG terminals, long-distance transmission pipelines and city gas distribution networks, will help drive 30bnm³ of gas demand growth over the next decade through fuel switching away from coal and oil. A recent switch to CNG from coal in India’s brick industry is encouraging greater gas use.

Exit Triggers

Order chain drying up in coming quarters

Unforeseeable change in Government policies

Declining margins and increasing debtors or working capital cycle days

Risks

Any change in CGD policy

Much faster penetration of EV in coming 2-3 years

Rising raw material and commodity costs

The Company is deriving significant portion of orders from major Oil & Gas distribution companies inducing a client concentration risk

IPO · Stocks

Equitas SFB IPO : Subscribe or NOT?

Its real ALPHA

The data has been compiled from various sources and might have small difference but overall theme is to subscribe or not — we will focus on that

Equitas Small Finance Bank– Equitas Small Finance Bank is the leader among SFBs in terms of the distribution network (With a network of 991 banking outlets across 17 states and union territories in India). Further, it is the second-largest SFB in India in terms of assets under management (AUM) and total deposits in FY19.

Offer purpose — Fresh issue of 280 cr to boost tier 1 capital plus 237 cr offer for sale

Service domains – The SFB’s product offerings include small business loans, housing loans, agriculture loans, vehicle loans and microfinance loans. On the liability side, it offers current accounts, salary accounts, savings accounts and term deposits to its customers. Besides, Equitas SFB also offers a range of third-party products, including insurance, FASTag for toll plazas and mutual fund products.

Strength –

A well-diversified asset portfolio

Large presence- It is a leader among SFBs in terms of the distribution network.

Risks —

Lower return ratio as compared to peers.

Asset Quality is poorer due to loss in vehicle finance segment. Provision coverage ratio is less

Stock will remain in overhang as promoter stake needs to be diluted to 40% in coming years

Fierce competition and concentration of customers in articular region

Future

Small finance banks are expected to grow 25% annually over next few years and IPO is priced at lower valuation compared to peers factoring lower asset quality and provisioning

Large presence and distribution network will help the bank to grow

Valuations

Seems reasonable

Should we apply?

People can avoid to subscribe

Better peers available in same segment for long term growth prospects

Listing day may see not any gains . Recommended to sell on listing day if any gains available

Also Read

UTI AMC IPO crisp Summary –Listed below IPO price

CAMS IPO crisp summary — Listing with gains

Angel Broking IPO crisp summary –Listing Below

Happiest Minds IPO crisp summary –Listing with substantial gains

In case you have any questions/ queries, please feel free to reach me through Contact Form

Do spread the word among your peers, family members or anyone who can benefit from this blog and asked them to subscribe. But be selfish and take care of yourself first by subscribing before they do.

Enjoy the day and your life. Don’t forget, we are alone in this grand universe and may not get a chance to live again.

IPO · Stocks · Wealth creation

Likhitha Infra IPO : Subscribe or NOT?

Its real ALPHA

The data has been compiled from various sources and might have small difference but overall theme is to subscribe or not — we will focus on that

Likhitha Infra– (approx 32 yr old company) is an Oil Gas Pipeline Infrastructure provider in India. Focused on laying pipeline networks, Operation and maintenance of city gas distribution companies in India

Offer purpose — 61 crores to meet working capital requirement

Key Service domains – Cross country pipelines, City gas distributions including CNG stations, Operation and maintenance

Clients -Established players from Oil and Gas industry

Risks —

Major revenue from few clients may deprive the company from pricing power

Inherent risks due to long term nature of projects

Future

CGD is increasing in India and company is at right place for its business to grow with
Strong client base, Efficient business model
Strong project execution capabilities , Diversified geographical presence in India

Valuations

Seems attractive

Should we apply?

People can subscribe for long term growth prospects

Listing day may see gains . Recommended to hold and buy more if listed at IPO price +/-10%

Also Read

UTI AMC IPO crisp Summary

CAMS IPO crisp summary — Listing Awaited

Angel Broking IPO crisp summary –Listing Awaited

Happiest Minds IPO crisp summary –Listing with substantial gains

In case you have any questions/ queries, please feel free to reach me through Contact Form

Do spread the word among your peers, family members or anyone who can benefit from this blog and asked them to subscribe. But be selfish and take care of yourself first by subscribing before they do.

Enjoy the day and your life. Don’t forget, we are alone in this grand universe and may not get a chance to live again.