Likhitha Infrastructure Limited, a Hyderabad-headquartered Oil and Gas Pipeline Infrastructure service provider, has announced the price band of Rs. 117- Rs. 120 for its initial public offering. The IPO will open on Tuesday, September 29, 2020, and close on Thursday, October 01, 2020.
The IPO consists of fresh issue of upto 51,00,000 Equity Shares representing 25.86% of the post issue shareholding; expecting to raise a total amount upto Rs. 61.20 crore. The proceeds of the IPO will be utilised by the Company towards its working capital requirements so as to capitalise on the growing demand from Oil and Gas sector, and for general corporate purposes.
The Company is led by Mr. Srinivasa Rao Gaddipati, a first-generation entrepreneur with around three decades of technical experience and co-promoted by his daughter, Ms. Likhitha Gaddipati who has attained a Master’s degree from Illinois Institute of Technology and professional experience in USA. The Company has over two decades of experience in laying of pipeline networks alongwith construction of associated facilities, as well as providing operations & maintenance services to leading City Gas Distribution (“CGD”) Companies in India.
The Company has executed the first Trans-National Cross-Country Pipeline of South-East Asia connecting India to Nepal. Its projects are spread across over 16 states and 2 Union Territories in India and has successfully laid over 600 Kms. of Oil and Gas pipelines including steel and Medium-Density Polyethylene (“MDPE”) network in past 5 fiscals. Additionally, the Company has laid approximately 800 kms of Oil and Gas pipelines for on-going projects. The Company has a strong client base consisting of leading gas distribution companies in India including both the private and public players and a strong Order Book (i.e. the unexecuted portion of the much larger total contract value) of approximately Rs. 663 crore as on July 31, 2020.
For the Financial Year 2019-20, the Company clocked a Total Revenue of Rs. 162.79 crores, an EBIDTA of Rs. 31.22 crores, Profit After Tax of Rs. 19.87 crores, and Operating Cash Flow of Rs. 19.15 crores. For the Financial Year 2019-20, the Company’s efficiency ratios are: Avg. ROCE (%) of 58.53%, Avg. RONW (%) of 33.06%, EPS (Rs. per share) of 13.59, Working Capital (Days) of 31.30 days, PAT margin (%) of 12.21% and EBIDTA margin (%) of 19.18%.
Indian Government has been working on a fever pitch to expand oil and gas infrastructure across the country. The country is targeting US$ 100 billion worth investment in gas infrastructure by 2022 and aims to add another 228 cities to the gas distribution (CGD) network. This would include setting up RLNG terminals, pipeline projects, completion of the gas grid and setting up of CGD network in more cities. The government has adopted several policies to fulfil the increasing demand such as, allowing 100 per cent Foreign Direct Investment (FDI) in upstream and private sector refining projects and planning to invest Rs 70,000 crore (US$ 9.97 billion) to expand the gas pipeline network across the country. At the same time, Natural gas demand from the power sector is expected to be driven, not only by the shortage of domestic coal supply and the rising cost of its substitute i.e. imported coal but also by increased domestic gas supply and power sector reforms, including those aimed to meet sustainable development goals. (Source: https://www.ibef.org/industry/oil-gas-india.aspx )
Unistone Capital Private Limited is the Book Running Lead Manager to the issue.