Lakshya Powertech IPO Lists at ₹342 Surges 90% Above Issue Price

Lakshya Powertech Limited, an engineering services company specializing in power generation and oil & gas sectors, made a stellar debut on the Indian stock market on Wednesday, 23rd October 2024, with its shares listing at a significant premium to the issue price on the National Stock Exchange (NSE) SME platform.

Listing Details

• Listing Price: Lakshya Powertech shares were listed at ₹342 per share on the NSE SME platform, marking an exceptional start to its journey as a publicly traded company.
• Comparison to Issue Price: The listing price represents a substantial premium over the IPO issue price. Lakshya Powertech had set its IPO price band from ₹171 to ₹180 per share, with the final issue price being fixed at the upper end of ₹180.
• Percentage Change: The listing price of ₹342 on the NSE SME translates to a premium of 90% over the issue price of ₹180.

First-Day Trading Performance

• Opening vs. Latest Price: Following its strong opening, Lakshya Powertech's share price continued to rise. By 10:47 AM, the stock was trading at ₹359.10, up 5% from its opening price and 99.5% above the issue price, hitting the upper circuit for the day.
• Market Capitalisation: As of 10:47 AM, the company's market capitalisation stood at ₹362.11 crore.
• Trading Volume: The traded volume was 7.32 lakh shares with a traded value of ₹25.82 crore, indicating significant investor interest on the first day of listing.

Market Sentiment and Analysis

• Market Reaction: The market reacted overwhelmingly positively to Lakshya Powertech's listing. The strong listing premium and hitting the upper circuit indicate robust demand and investor confidence in the company's prospects.
• Subscription Rate: The IPO was massively oversubscribed by 573.36 times, with NIIs leading at 1,117.75 times subscription, followed by retail investors at 590.26 times, and QIBs at 212.18 times.
• Grey Market Premium: Prior to listing, shares were trading at a premium of ₹170 in the grey market, which was significantly surpassed at listing.

Growth Drivers and Challenges

Expected drivers of future performance:

• Strong project management expertise
• Solid order book worth ₹265+ crore as of August 31, 2024
• Expansion into renewables and green energy businesses
• Diverse industry presence across power generation and oil & gas sectors

Potential challenges:

• Rapid growth raising sustainability concerns
• Competitive EPC sector
• Project execution risks

Utilisation of IPO Proceeds 

Lakshya Powertech plans to use the funds for:

• Prepayment or repayment of outstanding borrowings
• Funding working capital requirements
• General corporate purposes
   

Financial Performance

The company has demonstrated exceptional growth:

• Revenue increased by 181% to ₹14,941.92 lakh in FY2024 from ₹5,311.21 lakh in FY2023
• Profit After Tax (PAT) rose by 478% to ₹1,567.77 lakh in FY2024 from ₹271.09 lakh in FY2023

As Lakshya Powertech begins its journey as a listed entity, market participants will closely monitor its ability to execute its strong order book and maintain its growth trajectory. The stellar listing and overwhelming subscription rates suggest extremely positive market sentiment towards the company's prospects in the specialized engineering services sector. Investors will be watching for sustained financial performance and successful project execution, particularly given the company's rapid recent growth.