Chennai-based Latent View Analytics created headlines by becoming India’s most oversubscribed initial public offering, with investors flush with cash rushing to invest in the data analytics firm.
On Friday, the last day for subscription, the Latent View Analytics IPO was subscribed to 326.49 times. The bids totaled Rs 1.12 lakh crore as of Friday’s closing, illustrating the primary market’s enthusiasm this year.
Latent View Analytics’ initial public offering outperformed Paras Defence and Space Technologies Ltd’s IPO, which was subscribed to roughly 304 times just a few weeks ago. Salasar Techno Engineering Ltd was the most oversubscribed initial share offering prior to then, with 273 times in July 2017.
The outrageous demand for Latent View’s IPO emerges just days after Paytm’s Rs 18,300 crore public offering, India’s biggest-ever IPO after Coal India Ltd, which raised more than Rs 15,000 crore more than a decade ago. Paytm received a lackluster response from investors, attracting bids for only 1.89 times the shares on offer.
The Latent View rush resulted in a 150 percent premium for the shares on the unofficial grey market. The price band for the offering was 190-197 per share, with a grey market premium of 290 per share, according to a dealer who requested anonymity.
The Rs 600 crore IPO drew a lot of attention from all kinds of investors. According to market data, bids for a whopping 5.72 billion shares were placed as of 05.30 pm, compared to the issue size of 16.9 million shares, excluding the anchor allotment. The book was subscribed to 151 times by the institutional investor category, which got bids for 1.36 billion shares.
The non-institutional category, which includes high-net-worth individuals, was occupied 882 times. Demand from retail investors, whose investments in an IPO cannot exceed Rs 2 lakh, was 124 times higher. Market analysts highlighted that the IPO seemed to be properly priced at 42.6 times FY21 annual earnings and 43.7 times FY22 annual profits ahead of the IPO.
Latent View’s IPO comprises a Rs 474 crore primary share issue along with a Rs 126 crore offer for sale. The company will have a valuation of about Rs 3,900 crore at the top end. The Chennai-based firm is one of the country’s top pure-play data analytics services providers. I serve in areas such as business analytics, data engineering, consulting services, and digital solutions.
Latent View’s revenues have increased considerably during the last two years. While revenue increased at a 3 percent compound annual growth rate (CAGR) from FY19 to FY21, earnings before interest, tax, depreciation, and amortization (EBITDA) and net profit increased at a 20 percent and 24 percent CAGR, respectively. Notably, the EBITDA margin increased from 25.3 percent in the fiscal year 2019 to 34.2 percent in the fiscal year 2021.