L&T Infotech to launch IPO on 11 July at Rs705-710 per share

Larsen and Toubro Infotech Ltd, the information technology (IT) services unit of India’s largest engineering company, will launch its initial public offering (IPO) on 11 July, the parent firm said in a filing to stock exchanges on Wednesday.

The IPO will close on 13 July.

L&T Infotech has fixed a price band of Rs.705-710 per share for offering, the filing said. At the upper end of the price band, the IPO size would be Rs.1,242.5 crore. The company is offering a discount of Rs.10 for retail investors.

The public offering is a pure offer for sale with the parent firm L&T looking to divest about 10.85% of its stake in the company.

The IT services arm of L&T is structured around two businesses—the industrials and the services clusters. The industrials cluster caters to clients such as manufacturing, energy and utilities, hi-tech and consumer electronics, automotive and aerospace, engineering and construction. The services cluster focuses on banking, financial services, insurance, travel and logistics, media and entertainment and healthcare.

L&T Infotech had initially filed its IPO draft red herring prospectus (DRHP) in September 2015. However, in April the company refiled its DRHP.

“Since the DRHP was filed several months ago, and in the IT services industry business changes on a quarterly basis, when our firm does take the L&T Infotech IPO to the market, it should do so on the basis of the most recent financial results,” an L&T spokesperson said on 11 April.

The company has hired Citigroup Global Markets India Pvt. Ltd, Kotak Mahindra Capital Co. Ltd and ICICI Securities Ltd to manage the share sale.

L&T Infotech’s revenue rose 2.15% to Rs.4,744 crore for the year ended 31 March from Rs.4,644 crore in the previous year. Net profit fell 14% to Rs.774 crore from Rs.903 crore a year ago.

The IT services company’s total headcount stood at 20,072 as of end of fiscal year 2015-16.

L&T’s plan to list the IT services arm is part of the group’s plans to monetize its shareholding in several of its businesses.

In the company’s 2014-15 annual report, L&T group executive chairman A.M. Naik had said that the company will monetize assets from time to time. Naik had said that L&T intends to unlock value of its IT and technology services business.

On 9 June, Bloomberg reported that L&T has picked advisers to prepare an IPO of about Rs.1,000 crore for its subsidiary L&T Technology Services Ltd. The Mumbai-based conglomerate is working with Kotak Mahindra Bank Ltd, Bank of America Corp. and JM Financial Ltd on the engineering-services unit’s listing, Bloomberg reported.

So far this year, 11 firms have raised approximately Rs.7,783.6 crore through the IPO route, according to data from primary market tracker Prime Database. In 2015, 21 companies had raised Rs.13,614 crore through IPOs, data shows.