Laxmi India Finance IPO open for bidding: Should you subscribe? Check details
PL Capital Markets Private Limited is the book-running lead manager, and MUFG Intime India Private Limited (Link Intime) is the registrar for the issue.Laxmi India Finance Limited (LIFL) is a non-banking financial company (NBFC) that focuses on providing loans to small businesses, self-employed individuals, and underserved customers. It has been working in the MSME segment, which is often seen as a key part of India's growing formal economy.SHOULD YOU SUBSCRIBE?Bajaj Broking has given a 'Subscribe for Long Term' recommendation.In its IPO note, the brokerage said, 'LIFL is focused on serving the financial needs of underserved customers and MSMEs. Over the last three financial years, the company has posted steady growth in revenue and profits.'LIFL reported a total income and net profit of Rs 130.67 crore and Rs 15.97 crore in FY23, Rs 175.02 crore and Rs 22.47 crore in FY24, and Rs 248.04 crore and Rs 36.01 crore in FY25. The company also posted an average earnings per share (EPS) of Rs 7.26 and return on net worth (RoNW) of 14.01% over the same period. Based on FY25 earnings, the issue is priced at a price-to-earnings (P/E) ratio of 22.93, and based on FY24, the P/E works out to 36.74.However, some experts have raised concerns around the high valuation. Bhavik Joshi, Business Head at INVasset PMS, said, 'The issue's pricing at 22.93 times FY25 earnings and 1.95 times post-issue book value appears high when compared with similar companies, most of which trade at lower valuations.'He added, 'While the company's return ratios are healthy—3% return on assets (RoA) and 15.66% RoNW in FY25—there is not a large margin of safety at these levels. NBFCs in general are facing pressure from tighter rules and concerns around asset quality. So, investors should be selective and not rush in.'WHAT THE GREY MARKET SAYSadvertisementThe grey market premium (GMP) for Laxmi India Finance IPO was Rs 9 as of 8:02 AM on July 29. Based on the cap price of Rs 158 per share, the expected listing price is Rs 167, suggesting a possible listing gain of around 5.70%.The allotment of shares is expected to be finalised on Friday, August 1, 2025. If allotted, the shares will be credited to investors' demat accounts ahead of the tentative listing date, which is set for Tuesday, August 5, 2025. The shares will be listed on both BSE and NSE.(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- Ends
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