Laser Power's ₹742 crore IPO sees muted early demand
The Indian power equipment maker is raising ₹742 crore, primarily to pay down debt, but institutional demand remains subdued midway through the subscription period.
Laser Power & Infra Ltd. launched its ₹742 crore initial public offering on July 9, seeking capital to strengthen a balance sheet burdened by borrowings. The offering comprises a ₹542 crore fresh issue alongside a ₹200 crore offer for sale by promoters. Promoters Deepak Goel, Rakhi Goel, and Devesh Goel are offloading shares worth ₹112.5 crore, ₹25 crore, and ₹62.5 crore, respectively. Anchor investors already committed ₹223 crore a day before the subscription window opened.
Demand has been lukewarm through the first two days. The overall book was covered exactly one time by Tuesday evening, driven almost entirely by non-institutional investors, who bid 1.93 times their allocated portion. BSE data showed 25.5 million shares bid against 25.6 million on offer. Qualified institutional buyers and retail investors have held back, filling just 64% and 80% of their respective quotas.
Despite the tepid institutional response, unlisted market participants are pricing in a strong debut. A grey market premium of ₹34.50 suggests a 16% listing gain, implying an opening price of around ₹248.50 if shares price at the top of the ₹205–214 band. The premium fluctuated between zero and ₹36.50 over the past ten sessions, indicating optimistic expectations.
Debt reduction drives valuation
The company manufactures power cables and conductors at three facilities in West Bengal with a combined capacity of 85,448 metric tonnes. Nearly 90% of the fresh issue proceeds—roughly ₹490 crore—are earmarked specifically for debt prepayment. IIFL Capital Services and ICICI Securities are managing the issue. Analysts note this deleveraging is critical, as Laser Power reported a 72.5% compound annual growth rate in adjusted profit after tax between FY24 and FY26.
Four domestic brokerages, including SBICAP Securities and Swastika Investmart, have issued "subscribe" ratings for the offering. They argue that while valuations ranging from 16.2x to 25.3x FY26 price-to-earnings ratios appear demanding, the stock trades at a discount to larger peers like KEI Industries. A ₹3,243 crore order book provides 12 to 18 months of revenue visibility, supported by India's ongoing investments in power transmission and smart grid modernization.
Bids are open until July 13. Shares are scheduled to begin trading on the BSE and NSE on July 16.
