L&T Technology Services opened at Rs 920 on the National Stock Exchange (NSE) today, against an issue price of Rs 860 per share, translating into a premium of around 7%. The issue was oversubscribed
over 2.5 times.
However, by 10:10am, the stock had trimmed some of the gains, and was trading 4.4% higher at Rs 897 levels with a traded volume of around 3.94 million shares. It hit a high of Rs 931.45 in intra-day deals on the NSE.
The company provides engineering, research and development (ER&D) services to manufacturing, technology and process engineering companies. It operates in five industry segments – transportation, industrial products, telecom and hi-tech, process industry and medical devices.
Earlier in July 2016, another subsidiary of Larsen & Toubro (L&T) – L&T Infotech – had tapped the primary market for funds. The Rs 1,243 crore IPO was oversubscribed nearly 12 times with over a million applications – the highest in five years, but saw a tepid listing. The stock had debuted 6% below its issue price of Rs 710 per share.
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"Considering the strong growth potential of the company, which is ahead of some of the industry peers, coupled with 38%+ return on equity (RoE) levels in FY2016; FY2015-16 average cash flow from operations of Rs 446 crore; strong around 64% dividend payout (translating to around 4% dividend yield), we are of view that L&T Technology Services stock has the potential to trade at premium to the peers," Angel Broking said in a pre-IPO note.