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.

The above issue would be labelled a disaster and let’s hope the listing is not another.

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 is into the ERD space and was formed from an existing division of L&T Info the company which listed in July 2016. To this some acquisitions were added and the new entity LTTS was formed. The shares being offered in a price band of Rs 850-860 are steeply priced on a fully diluted consolidated basis based on March 2016 results at 26.5 times to 26.8 times. Even though this is a standalone ERD company unlike many others for whom it is a vertical or business unit, there is nothing left on the table for investors.

Added to this is the baggage of the fact that both the previous divestments from L&T did not yield results and profits from investments for investors. While L&T Finance took more than a couple of years to do so, L&T Infotech has yet to yield returns even though two months have almost passed since listing. The share is actually trading with losses of about 10% at Rs 640 against an issue price of Rs 710.

As of yesterday evening which was the 2nd day of subscription, the issue was subscribed 0.71 times with the QIB portion subscribed 1.10 times, HNI 0.03 and retail 0.77 times. A total of 1.25 lakh applications were received which is a far cry from 10.90 lac applications received in the issue of L&T infotech. I am not sure whether any more divestments from the L&T stable will happen or not but this is a wakeup call for the company and its professional management.

The odds are against the investor making money in this issue. That is why the heading third time lucky or hat trick of failures. Take your call.

GNA Axles Limited which is tapping the capital markets with its fresh issue of 63 lakh shares in a price band of Rs 205-207 completed its allocation to anchor investLIST TO BE ATTACHEDors. A total of 18.3 lakh shares were allotted to 3 anchor investors comprising of 7 entities. The issue opens on Wednesday the 14th of September and closes on Friday the 16th of September. The company as the name suggests is a manufacturer and exporter of axles used in highway and off-highway vehicles.

The full list of anchor investors is given below: –