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Unknown Facts about L&T Infotech IPO 10 Unknown / Less known Facts about L&T Infotech IPO


L&T Infotech IPO is creating some buzz in the stock market. This IPO would open for subscription on 11 th July, 2016. L&T Infotech Limited is one of the India’s leading global IT services and solutions companies.  Myinvestmentideas.com was the first blog in India to write complete IPO review and gave a BUY recommendation for this IPO. While I indicated several key points about L&T Infotech IPO earlier, here are some of the unknown / less known facts about this IPO. Why should you invest in this IPO?

About L&T Infotech Limited


L&T Infotech is one of India’s leading global IT services and solutions companies. In 2015, NASSCOM ranked it as the sixth largest Indian IT services company in terms of export revenues. They are amongst the top 20 IT service providers globally in 2015 according to the Everest Group’s PEAK Matrix for IT service providers. Its clients comprise some of the world’s largest organisations, including 43 of the Fortune Global 500 companies.

Also Read: Best Small Cap Stocks that gave highest returns upto 500% in 1 year

L&T Infotech issue price is at price band of Rs 705-710 and would open for subscription on 11 th July, 2016

10 Unknown / Less known Facts about L&T Infotech IPO


1) IPO Proceeds would not go to the company. L&T (Group company) is selling L&T infotech Stake and aiming to get Rs 1,200 Crores through this issue.

2) L&T Infotech is working with 248 clients which includes 49 fortune 500 clients across the world.

3) L&T Infotech 38% revenues come from top 5 clients. It has 3 customers from whom they get over $50+ Mn revenues. They have 8 customers from whom they get over $ 20 Mn revenues. It has 20 clients from whom it gets over $ 10 Mn revenues. It is engaged with 100 clients for over 3 years. It got fantastic billing rates.

4) L&T Infotech is 6 th largest IT Service provider in India and among top-20 IT services provider all over the world. L&T Infotech has 22 data centres and over 44 sales offices across the world.

5) L&T Infotech business is focused in North America. It has 70% of its revenues from US, 18% from Europe and a balance of 12% from the Rest of the World.

6) Key point is that its business not focused on just Banking and Financial Services. It gets revenue of 27% from BFS, 20% insurance, 13% from insurance and 9% each from Pharma, Retail and Consumer services.

7) L&T Infotech Revenues have grown from Rs 2,462.68 Crores  for the year ended Mar-11 to Rs 5,069.53 Crores for the year ended Mar-15 indicating a strong revenue growth of 20% CAGR.

8) The company posted a profit of Rs 331 Crores for the year ended Mar-11 and profit of Rs 769.16 Crores for the year ended Mar-2015. It generates 15% margins in the last couple of years. Many mid-cap IT service providers are generating margins of 5% to 10% only.

9) IT Majors like Infy, TCS, Wipro etc., are trading at a P/E ratio of 13% to 20%. L&T Infotech issue price is at a P/E ratio of 12.5 times its 9 months EPS (FY16). Hence it is attractively priced.

10) Myinvestmentideas.com is the first blog in India that gave complete review and indicated “BUY” recommendation for a L&T Infotech IPO. 

Issue details of L&T Infotech IPO


  • IPO opens: 11-Jul-2016
  • IPO closes: 13-Jul-2016
  • Face Value: Rs 1 per share
  • Issue price band: Rs 705 to Rs 710 per share
  • Issue size: Rs 1,200 Crores on lower price band
  • Lead Managers: Citi Global, Kotak Mahindra, ICICI Securities.
  • Listing: BSE / NSE

Objects of the L&T Infotech IPO issue


  • To achieve the benefits of listing the Equity Shares on the Stock Exchanges and
  • To carry out the sale of up to 17,500,000 Equity Shares by the Selling Shareholder. The company would not get any proceeds.
  • Issue expenses.

​Also Read: Complete review of L&T Infotech IPO

Disclaimer : I have an interest in investing in this IPO. The idea of giving positive and negative factors to investors in this article is to create awareness and education about this IPO. One should NOT constitute this as investment advice to buy or not to buy this IPO. Please consult your investment advisor before you invest in such high risk investment options.

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Suresh
Unknown / Less known Facts about L&T Infotech IPO

17 comments

  • jaikumar

    Is the sectorial distribution of clients ?, given the disruption of cloud and automation , few sectors have a bigger impact than the others , so if we have sector distribution of the clients will be also very helpful in decision making.

  • pankaj

    Thanks for update suresh. 

  • Karthikraja

    Hi,

    Your artciles are always informative. 

    I am concern of the Trade Recivables from 2014 to 2016 of the " Other Debts – Others" category. 

    2014 – 838 Crores

    2015 – 997 Crores

    2016 – 1057 Crores

    It is been increasing every year with tag of " considered good". Why compani is not able to collect those on time. Please share some light on it

  • Harsh Patel

    Dear Sir,

    Interesting post…i am agree with point 10. Keep it up nice work.

  • Rakesh Dhar Pandey

    Analysis by you is realistic.

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