Data analytics firm Latent View Analytics’ maiden offering, which ended on Friday, garnered 339 times (x) subscription, making it the most-subscribed initial public offering (IPO) ever. The total bids exceeded Rs 1.1 trillion—nearly six times more than what the country’s largest IPO, that of Paytm, received earlier this week.
The high networth individual (HNI) portion of the IPO garnered nearly 882x subscription with bids totalling Rs 78,498 crore. Retail portion was subscribed 124x and the institutional investor portion saw over 150x subscription. The price band for the IPO has been set at Rs 190-197 per share.
Latent View displaced Paras Defence, which came out with an IPO in September that was subscribed 304x, at the top of the subscription charts. And, Latent View’s investors may be in for a treat on listing day, if Paras Defence’s record is anything to go by. After its stellar IPO, Paras Defence’s shares had skyrocketed 2.85x on debut.
Grey market operators expect Latent View’s stock to soar 2.5x on listing. The mouth-watering grey market premium enticed HNIs to place massive leveraged bets on the IPO, said market players.
Latent View’s IPO consisted of Rs 474 crore worth of fresh fundraise and a Rs 126 crore offer for sale. At the top end, the company will have a market capitalisation of nearly Rs 3,900 crore.
The firm is among the leading pure-play data analytics services companies in the country. The company functions in areas such as consulting services, data engineering, business analytics and digital solutions.
Analysts said investors were attracted to Latent View’s valuation discount to Happiest Minds, which operates in a similar space.
“Considering the FY21 (financial year 2020-21) adjusted EPS (earnings per share) of Rs 4.6 on post-issue basis, the company is going to list at a P/E (price-to-equity multiple) of 42.83x, while its peer, Happiest Minds, is trading at a P/E of 113,” said a note by Marwadi Financial, which had a ‘subscribe’ rating on the IPO.
“The issue is priced at a price-to-book value of 7.3 times based on its NAV (net asset value) of Rs 27 as of June 30. The company has a healthy margin profile with three-year average return on net worth of 21.15 per cent. Considering the company’s plan for inorganic growth, longstanding relationship with some of the Fortune 500 companies, its leadership position in the industry, we recommend a ‘subscribe’ rating to this IPO,” said a note by Anand Rathi.