The initial public offering (IPO) of India’s sixth largest IT firm Larsen & Toubro (L&T) Infotech Limited will open from July 11 as its parent company L&T is putting 1.75 crore shares on the block at a price band of INR 705-INR 710 for each equity share of face value of INR 1.
The total offer size is INR 1,233-INR 1,242 crore at the respective ends of the price band.
The company with a topline of $887 million in FY16 plans to to double its revenues in the next three to four years through acquisitions and organic growth.
“We will be doubling the revenues in the next 3-4 years,” PTI report published in Economic Times quoted L&T Groups Executive Chairman A M Naik as saying.
The company had posted a topline of $887 million in 2015-16. Over the last five years, its revenues have grown 17-18 per cent, but dropped to 13-14 per cent during last fiscal due to slowdown in the performance of the oil and gas sector because of depressed commodity prices.
Naik said that over INR 1,200 crore to be raised through the offering, which will be the third public issue from the diversified Group, will be deployed for acquisitions and working capital requirements.
For acquisitions, the company will focus on the North American and European markets which contribute a bulk of its revenues at present, L&T Infotech Chief Executive and Managing Director Sanjay Jalona told reporters.
He however declined to give any futuristic guidance and answer queries on the size of the acquisitions or the technologies it will focus on.
Jalona said there will be a “negligible impact” from UK’s exit from the European Union as the country contributes only about 2 per cent of the company’s revenue. Europe contributes 17 per cent of its overall revenues, of which 11 per cent comes from the Nordic countries (Denmark, Finland, Iceland, Norway and Sweden, including their associated territories) alone, he said.
Jalona said the Brexit vote, which will entail separation of businesses between the UK and continental Europe for its clients, may well turn out to be a business opportunity for the outsourcing sector.
Meanwhile, Uday Kotak of Kotak Mahindra Group, among the lead managers for the IPO, said despite multiple “obituaries” written about the IT segment over the years, the sector continues to be attractive as it has shown resilience in the face of challenges.