Likhitha Infrastructure set to open IPO on September 29, 2020

• Price Band of Rs. 117- Rs. 120 per Equity Share
• Issue shall remain open from September 29, 2020 to October 01, 2020.
• Minimum Bid Lot is 125 Equity Shares and in multiples of 125 Equity Shares thereafter
• Shares to be listed on BSE and NSE
• Unistone Capital is the Book Running Lead Manager to the Issue
• Key Strengths:
• Strong financial performance:For Fiscal 2020- low Debt- Equity Ratio of 0.01:1 and EPS of Rs. 13.59.For the last 3 Fiscals-Avg.ROCE over 45% andAvg.RONW over 24%
• Long term relationship with clients and repeat business from leading City Gas Distribution (“CGD”) Companies
• Significant experience and strong presence in India
• Strong project execution capabilities and experienced management team

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.

Unistone Capital Private Limited is the Book Running Lead Manager to the issue.

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 uptoRs. 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 entrepreneurwith around three decades of technical experience and co-promoted byhis 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 anda strongOrder 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 ) 

Note: Capitalized terms used and not defined herein shall have the respective meanings ascribed to them in the Red Herring Prospectus (“RHP”) dated September 17, 2020. 

Disclaimer: Likhitha Infrastructure Limited is proposing, subject to applicable statutory and regulatory requirements, receipt of requisite approvals, market conditions and other considerations, to undertake an initial public offering of its Equity Shares and has filed the RHP with Registrar of Companies Telangana at Hyderabad on September 17, 2020. The RHP shall be available on the website of the SEBI at www.sebi.gov.in, the website of the BRLM to the Issue at www.unistonecapital.com and websites of BSE and NSE i.e. www.bseindia.com and www.nseindia.com, respectively. Investors should note that investment in equity shares involves a high degree of risk and for details relating to the same, see section titled “Risk Factors” beginning on page 31 of the RHP. Potential investors should not rely on the DRHP for making any investment decision.

The Equity Shares offered in the Issue have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or any state securities laws in the United States, and unless so registered, may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any applicable U.S. state securities laws. There will be no public offering in the United States and the securities being offered in this announcement are not being offered or sold in the United States.