‘Subscribe’ to L&T Finance IPO with long-term view: Nirmal Bang

MUMBAI: Nirmal Bang has advised investors with long term perspective to ‘Subscribe’ to the initial public offering of L&T Finance Holdings. The issue looks fairly priced for near term and does not offer a potential upside on listing, the report says.

The company has entered the capital market to raise between Rs 1245 – 1076 crore by issuing shares in the price band of Rs 51- 59 per share.

However, the Reserve Bank of India’s higher-than-expected hike on Tuesday weighed on the anchor investment in L&T Finance Holdings at the company has raised Rs 153 crore by placing shares of three institutional investors at Rs 56 per share.

“L&TFH shares is offered at 2.04x P/BV and 16.9x P/E calculated at higher band of price for FY12E as compared to its peers the offer looks fairly priced for near term and does not offer a potential upside on listing. However, we believe with diversified credit portfolio, L&T Finance can weather these issues better than its peers.

Considering promoter’s leadership position in the market, visible brand, better operational parameters & diversified credit portfolio, we expect L&TFH can command higher premium going ahead. Therefore, we recommend a “SUBSCRIBE from a long term perspective,” the report said.

L&T Finance Holdings offers diverse range of financial products and services across corporate, retail and infrastructure finance sectors through its wholly owned subsidiaries L&T Finance and L&T Infrastructure Finance Company respectively.

The company also provides mutual fund products and investment management services, through L&T Investment Management which is also a wholly owned subsidiary of L&T Finance.