L&T Technology Services Limited (LTTS) which had tapped the capital market with its offer for sale of 104 lakh shares of Rs 2 each in a price band of Rs 850-860 was subscribed. The issue had opened on Monday the 12th of September and closed on Thursday the 15th of September. T L&T Technology Services Limited (LTTS) is tapping the capital market with its offer for sale of 104 lakh shares of Rs 2 each in a price band of Rs 850-860. The issue has opened on Monday the 12th of September and closes today the 15th of September. The company had earlier allotted 31.20 lakh shares to 19 anchor investors comprising of 33 entities. The company had earlier allotted 31.20 lakh shares to 19 anchor investors comprising of 33 entities.
The subscription levels are not at all comforting with the overall figure being just 2.53 times. This is in sharp contrast to the 11.69 time figure for L&T Infotech which incidentally was also a bigger issue at Rs 1.75 cr shares raising Rs 1,242 crs. That issue was subscribed across segments and received excellent response. QIB portion was subscribed 19.91 times, HNI portion 10.76 times and Retail 7.39 times. As many as 10.90 lakh applications were received. In stark contrast the issue from L&T Technology Services saw a substantial drop in interest and subscription across buckets. The QIB portion was subscribed 5.01 times, HNI just about subscribed at 1.03 times and Retail 1.75 times. The total number of applications received was 2.85 lakh applications.
These numbers tell the story. Firstly investors were unhappy that they lost money in the issue of L&T Infotech and the share continues to trade about 10% below the issue price of Rs 710. Secondly the asking price of this issue was steep and the possibility of losing money was looming large. The mainstay of L&T and its loyalty amongst retail investors has been exposed post this issue. One hopes that if there are any more issues from the L&T stable left the management considers these points in pricing. Also at the end of the day all of this is the wealth of shareholders of L&T which is being divested with shareholders getting nothing. One hopes that in the current year the least that the management of L&T would do is announce a large dividend for shareholders.
| Category | Bucket Size | Shares Applied for | Times oversubscribed |
| QIB | 2080000 | 10425216 | 5.01 |
| HNI | 1560000 | 1604752 | 1.03 |
| Retail | 3640000 | 6353888 | 1.75 |
| Total | 7280000 | 18383856 | 2.53 |
The above issue would be labelled a disaster and let’s hope the listing is not another.
