The initial public offering (IPO) of Laser Power & Infra Ltd, an integrated energy infrastructure company with operations across the manufacturing, procurement and construction sectors, went public on Thursday, 9 July. The Rs 742-crore issue, which comprises a fresh issue of Rs 542 crore and an offer for sale (OFS) of Rs 200 crore, is being offered in a price band of Rs 203-214 per share, valuing the stock at 25.3 times on a post-issue basis. These are valuations significantly lower than some of its larger peers and in line with similarly sized peers. Analysts have a “Subscribe” rating on the IPO.
“At the higher price range, the company is valued at 19.8 times FY26 EPS and 12.6 times EV/Ebitda, which represents a significant discount to the listed peer average of around 36 times EV/Ebitda and 24 times EV/Ebitda. The valuation appears reasonable given the improving business mix and favorable industry outlook,” DR Choksey Research said.
The brokerage has a “subscribe” rating on the stock.
Laser Power & Infra’s listed peers include Apar Industries Ltd, KEI Industries, Polycab India Ltd, Dynamic Cables Ltd and Universal Cables. The IPO is priced at lower valuations than peers such as Apar Industries and KEI Industries, Swastika Investmart said in a note. The company’s order book of Rs 3,243 crore provides good revenue visibility over the next 12-18 months, it said.
“Sign in the medium to long term with attractive valuations, lower debt and strong sector prospects,” she said.
In the gray market, Laser Power’s gray market premium (GMP) was flat at Rs 15 apiece, indicating a potential listing gain of around 7 per cent to investors.
SBI Securities noted that Laser Power & Infra achieved revenue, EBITDA and adjusted earnings growth of 15.4 per cent, 39 per cent and 72.5 per cent respectively between FY24 and FY26. The company is a cable and connector manufacturer strategically located in eastern India that caters to the power transmission sector, she said. “The location advantage coupled with its partnership with a leading global player gives it an advantage over its peers,” she said.
Laser Power & Infra plans to use the IPO proceeds to reduce debt, which will reduce interest costs and help improve profitability. SBI Securities recommended investors to “subscribe” to the issue with a long-term investment horizon.
Choice Broking said the proposed use of a significant portion of the proceeds from the new issue to repay debt is expected to reduce financing costs, strengthen the balance sheet and support earnings growth and net profit margins.
The company is supported by a diversified product portfolio, expanding EPC presence and long-term industry tailwinds driven by increasing investments in power transmission and distribution infrastructure in India, Choice said.
“Laser Power & Infra is well positioned to maintain its growth trajectory. At the higher price range, the issue is valued at a P/E of 19.8x and Equity/Sales of 1.4x, compared to its listed peers, taking into account its integrated business model, improving financial position and earnings potential led by debt reduction. Accordingly, we recommend investors ‘buy for the long term’.”
A total of three of the four promoters involved in OFS.
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.
