The IT arm of Larsen and Toubro , L&T Infotech opens its IPO today and aims to raise Rs 1243 crore. The price band is fixed at Rs 705-710 per share. Making a bull case, Deven Choksey, MD , KR Choksey Investment Managers advices subscribing to the IPO because according to him it is a good combination of valuation and growth.
Given the company’s plans of organic and inorganic growth it has a potential of becoming the fastest growing IT Company in the space, believes Choksey. According to him, there could be a 30-50 percent upside for the stock.
It is an offer for sale issue, so the promoter and founder L&T will receive entire IPO proceeds of around Rs 1,200 crore. Post IPO, L&T's stake will be reduced to 84.7 percent from currently around 94.94 percent.
Retail investors will get a discount of Rs 10 per share on IPO price. The issue will close on July 13. With the promoters diluting a 10 percent stake, there is chance of value investors coming in and also a possibility of further dilution by promoters, says Choksey.
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Given the company’s plans of organic and inorganic growth it has a potential of becoming the fastest growing IT Company in the space, believes Choksey. According to him, there could be a 30-50 percent upside for the stock. 
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