Lakshya Powertech IPO day 2: Robust subscription signals strong market confidence

As the Indian primary market buzzes with activity, the initial public offering (IPO) of Lakshya Powertech Limited stands out with its remarkable traction. Launched on Wednesday, October 16, the IPO has already demonstrated overwhelming demand, closing its second day with nearly 167 times subscriptions. The power generation consultancy firm's IPO will remain open for subscription until Friday, October 18, as it aims to raise ₹49.91 crore through the sale of 27.73 lakh shares.

Unpacking the subscription frenzy

The SME IPO has captivated a diverse range of investors, showcasing significant subscription rates across different segments by the end of Thursday. The retail segment, often seen as a bellwether of market sentiment, was subscribed an astounding 252.91 times.

Non-institutional buyers showed strong interest with 206.32 times subscription, while the segment reserved for qualified institutional buyers was also well-received, securing 12.78 times the bids.

This fervent participation underscores the market's positive reception and confidence in Lakshya Powertech's business model and growth prospects.

IPO details at a glance

1. Grey Market Premium (GMP): As of 5:30 PM on Thursday, the GMP stood at ₹172, which suggests that the stock might debut at ₹352, marking a premium of 95.56% over the upper price band of ₹180.
2. IPO Price and Size: The price band for the IPO is set between ₹171 to ₹180 per share, aligning with the company's goal to garner ₹49.91 crore. These funds are earmarked for repaying borrowings, addressing working capital needs, and other corporate purposes.
3. Lot Size and Allocation: Investors can bid in lots of 800 shares. The IPO has allocated 5,24,800 shares to qualified institutional buyers, 3,96,000 shares to non-institutional buyers, and 8,96,000 shares to retail investors.
4. Important Dates: Post-closing on October 18, the allotment is expected to be finalised by Monday, October 21. Share allocations will hit demat accounts by Tuesday, October 22, with refunds processed the same day for unsuccessful bids.

Strategic business insights

Lakshya Powertech, specialising in freelance consultancy, operations, and maintenance for gas-fired power plants, has shown robust financial growth. The company's profit trajectory has been impressive, with after-tax profits for FY22, FY23, and FY24 recorded at ₹104.58 lakh, ₹271.09 lakh, and ₹1,567.77 lakh respectively. As of August 31, this financial year, the company has already amassed a profit of ₹597.11 lakh.

Why invest in stocks of Lakshya Powertech?

The IPO's strong subscription status and high GMP indicate a significant market appetite, suggesting that investing in stocks like those of Lakshya Powertech could offer substantial returns. For investors looking to diversify their portfolios and tap into the burgeoning power generation sector, this IPO presents a promising opportunity.

The upcoming listing on the NSE SME on October 23 is keenly awaited, as it will offer further insights into the market's valuation of Lakshya Powertech. With its solid financials and strategic market positioning, the company is poised for potential growth, making it an attractive option for those looking to invest in stocks with robust prospects.

Final thoughts

As Lakshya Powertech navigates through its final days of IPO subscription, the market's enthusiastic response serves as a testament to the company's strong fundamentals and potential for growth. 

Investors considering where to invest in stocks will find Lakshya Powertech's offering a compelling choice amidst the vibrant landscape of SME IPOs on the NSE. Keep an eye on this power player as it gears up for what appears to be a standout debut on the stock exchange.